The End of the Smartphone: What It Means for Investment Professionals
The next global extinction event is on the horizon . . . and it will dramatically change how the wealth management industry conducts day-to-day business, including how it connects with clients.
The day that your iPhone or Android grows as obsolete as the rotary phone might seem far away — especially if you’re reading this article on one of those devices right now. But the smartphone’s rampant success is already leading to its demise. As a recent CNBC article explains, “the smartphone market has reached maturity, and year-over-year growth is declining gradually.”
The time is ripe for a disruption — when money flows en masse from existing businesses and business models to new ones. Think of the shift from pagers to BlackBerry devices, or from the BlackBerry to the iPhone and Android.
So what is the next evolutionary step up from smartphones? It’s something that I’ve been noticing take hold for a while now in the more tech-savvy environs of Southeast Asia. Just take a look at my recent blog post, “Your Clothes Are Still Made in China but Now They Are Wearables.”
Yes, I’m talking about wearables — devices like the Google Glass and Apple Watch that have all the “smart” capabilities of your iPhone or Android coupled with the constant usability of a clothing accessory. Let’s say you’re walking through the city and you want to check a stock quote. Using a smartphone, you have to take the time to pull it out and look down at it. We’ve all felt the inconvenience and potential danger of walking with that distraction, especially in busy cities like New York, Boston, or Chicago.
Now imagine for a second that you can make that stock quote appear in your field of vision. Actually, you don’t have to imagine it because this online concept video for Fidelity Market Monitor for Glass demonstrates exactly what it would look like to wear the Google Glass equipped with Fidelity’s investment app. In the video, a man walks through his daily routine while logging on to his online account, hearing news articles read aloud, and checking stock quotes and the markets — all completely hands free.
A word of caution, however: A wave of Google Glass sales hasn’t happened yet and it may be some time before one does. On 15 January, Google announced that it was ending sales of the Glass prototype but is still committed to working on a newer version of it. This move came amid criticisms of the product in the media and privacy concerns that led some restaurants, bars, and movie theaters to ban the use of smartglasses.
Still, even with those temporary setbacks, the fact is that the times they are a-changin’: smartphones are becoming outdated technology and wearables are the next big thing.
With that in mind, it’s no surprise that Fidelity is an early innovator in developing a wearable investment app. As we industry veterans know all to well, Wall Street was an early adopter of smartphone technology, grasping the benefits of instant access to e-mail and real-time information before many other industries. Remember when you were one of the few people on your morning commute using a BlackBerry?
Looking forward, financial advisers and other wealth management professionals will have to be as savvy with wearables as they currently are with smartphones — otherwise, it’ll be like trying to get by with a pager today. And there’s no time to take a “wait-and-see” approach when it comes to anticipating the moment when wearables will dominate smart technology sales. Those who wait will be too far behind to catch up.
So what can CFA charterholders and other wealth management professionals do to prepare their businesses for the demise of smartphones? Frankly, a lot. Here are three ways to get started:
- Familiarize yourself with wearable devices — both those currently available as well as the ones under development. This doesn’t have to take a lot of time. Read news articles about the Apple Watch and Google Glass. And if you really want to stay in touch, set up a Google Alert on the products. If you have time, go to an Apple Store and try out an Apple Watch.
- Start to dream. Now that you have a basic understanding of what wearable technology can do — or will be able to do — start thinking about how it could change your daily routine, including the ways you do business. You may want to re-watch the Fidelity Market Monitor for Glass video to get ideas.
- Talk to clients. Many, if not most, of your clients will have heard of wearables like the Apple Watch even if they personally don’t own them yet. Talk to them informally and hypothetically about how they would use the technology to manage their finances and investments. These talks could help you develop a wearable-compatible app that is tailored to your clients’ wants and needs. And even if you and your firm don’t have the resources to create your own app, these talks can help you plan how you will use wearables and existing apps to connect with and serve clients.
The inevitable extinction of smartphones will impact the way you do business. Either you can be proactive and use the next generation of smart technology — that is, wearables — to your advantage, or you can play catch-up when the time comes. The choice is yours.
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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.
Photo credit: ©iStockphoto.com/JackJelly