Financial Architects – The Next Generation Asset Management
DeFi, Finance - August 25, 2020
An architect is someone who plans, designs and oversees the construction of a building. Similarly, a financial architect is someone who plans, designs and oversees the construction of a group of assets. You might be thinking, isn’t this what an investment manager does? For the most part, yes, but financial architects do so much more.
With the growth of technology, its application in the world of finance has become more personal. In the early days of investing, there was a ‘one size fits all approach’ whether it was for individual stocks of companies, or individual funds. In the modern investing world, no two groups of assets are the same.
Financial architects don’t simply allow investors to make their own portfolios based on the companies they like, they allow for ‘mass customization.’ Here are some of the individual characteristics which go into creating a custom portfolio,
- Risk profite
- Long-term and short-term goals
- Regular rate of return
- Invested amount
These are just from an investment point of view. Think about how different this list would be if we were to, say, make it for a married couple as opposed to a single adult, or a family with children, as opposed to a 22-year old college graduate? The combinations are endless, and hence there is a need to build portfolios through what we like to call ‘money legos.’
From investment characteristics, to personal characteristics, everything is created and automated by financial architects. And this isn’t just limited to stocks, or cryptos either. Through the creation of ‘synthetics,’ assets which mimic a group of other assets, mass customisation can involve a range of assets. You don’t have to be pigeon-holed into one fund, one stock, one cryptocurrency, or anything else.
What’s even more interesting is all this is being done in a decentralized manner, through blockchain technology, so there isn’t one central company either.
Bitcoin, Ethereum, real-estate, gold, oil, equity, bonds, you can invest in either of them, all of them, or a combination of them, in whatever proportion you like. That’s why financial architects are so important.
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