What are the 8 Best Personal Finance Apps and what impact do these apps have on Asset Management Companies? The advancement of technology brought more computing power and made computers more accessible and available to users whenever and wherever required. In turn, this led to the disappearance of many jobs and many more are expected to become obsolete due to the further development of technology. When was the last time you went to a photo studio to have your vacation photos developed? I guess never, since you have a smartphone or digital camera.
Another job that has vanished due to technology is the tax collector, as companies chose to digitize their taxes, saving money that would’ve been otherwise spent on hiring more employees. Moreover, the development of different apps that allow people to perform tasks like ordering pizza or hailing a taxi has eliminated jobs that had been previously been held by humans. Now, as the fintech sector is becoming stronger, there is some risk that technology will also affect jobs held by people in the asset management sector. This will be due to the fact that more and more people will rely on software like Apple Inc. (NASDAQ:AAPL) or Alphabet Inc (NASDAQ:GOOGL) apps to manage their budgets, analyze their expenses and even invest money for retirement. Algorithms that can safely invest money in a bunch of instruments based on preset requirements can be easily embedded in apps, so users can invest their money relying solely on information that is widely available online.
The success of these apps is due to millennials, who are easily adaptable to new technology and are quick to jump on new trends. In this way, millennials are more likely to build their own portfolios and manage their own money instead of going to an asset management company and paying a fee to do almost the same thing that can be done via an online platform or an app. And it’s logical, since over the past couple of years, S&P 500-tracking ETFs have outperformed hedge funds and there are many resources that can provide technical and fundamental information on different stocks or help identify some parameters for picking stocks to invest in.
Will these developments affect the $55 trillion asset management industry? That’s unlikely in the short- or medium-run, because financial apps still have some ground to cover in order to improve and perfect their software. Moreover, financial apps for Apple Inc. (NASDAQ:AAPL), Alphabet Inc (NASDAQ:GOOGL) or other companies’ smartphones still have to prove their worth, and convince users that utilizing them will indeed help them budget their expenses and save money. Algorithm-investing apps also have to show their performance and prove to users that they can build a decent portfolio and provide solid returns without the need to employ someone.
However, over the long run, more and more people will switch to software. Computer models have already redefined the hedge fund industry, with funds like Jim Simons’ Renaissance Technologies or Ray Dalio’s Bridgewater Associates relying mostly on algorithms to do their investing. As AI technology becomes more available and more sophisticated, investing algorithms will infiltrate the laptops, tablets and smartphones of most people. This will affect the way asset management firms work. Of course, they will keep catering to many high net-worth individuals, but young people with lower income are more likely to use apps, especially since their age allows them to take more risk. Asset management companies can adapt to the changes and incorporate their strategies into apps. This move could give them the advantage of releasing a new product under an already-strong brand and the automation of processes will allow them to cut costs.
With this in mind, let’s take a closer look at the 8 best personal finance apps. Some of them help users with budgeting their expenses, while others help them invest money and generate returns.