America is moving from a "brute force" economy to a "brain force" economy, and financial advisors are at the forefront of the shift. So says "Future Shock" author Alvin Toffler, who decades ago forecast the digital revolution, the decline of the nuclear family and the crack-up of the Soviet Union.
"Knowledge is becoming the central resource of the economy. Financial advisors are selling knowledge, which is intangible. We're moving toward a higher level of intangibility — investing in companies, like Google, that are entirely intangible. Most jobs will be based on the creation or manipulation of intangibles. Since the essence of the advisor's job is intangible, they're in the right place!" says Toffler, 77, in an interview.
His newest book is Revolutionary Wealth. A collaboration, like previous works, with wife Heidi Toffler, it forecasts the ways in which tomorrow's wealth will be created and how the new economy is set to explode.
With FAs offering clients even more services beyond the basics, job opportunities will widen, predicts Toffler. "We'll expand the concept of finance, and that will require more people" to do the work.
In a 1964 Horizon article, he coined the term, "future shock." Toffler's theory was that the future, barreling at us at high speed, could disorient us or render decision-making difficult. Six years later, he developed the concept into what would become a seminal bestseller.
"The Third Wave," published by the Tofflers in 1980, theorized about the rise of the "electronic cottage," where work and production would return to the home through use of computers and other high-tech gear. The new civilization they forecast represented a Third Wave of change rising from a waning Second Wave industrial era, preceded by a First Wave set in motion by the agricultural revolution.
Speaking by phone from his own electronic cottage near the University of California at Los Angeles, the famed writer has no shortage of enthusiasm about most new patterns of change. "Yes, there's a long list of threats and dangers," he says. "But on the other hand, there are many tremendously good things that can happen — like the fantastic developments taking place in medicine and science that will make it possible for people to lead longer, better lives. I remain stubbornly optimistic about a lot of things."
In financial services, Toffler sees FAs encountering "a further onslaught of innovation," resulting from, for example, creation of a "shadowy" non-money, or "para-currency," economy that he predicts will exist alongside the money economy. "It will be a new way of measuring the economy."
Further, "prosuming" — consumers consuming what they themselves produce — is about to blast off, bringing with it radical changes. Then there's outsourcing work to the customer — already in progress — such as self-service supermarket checkout and ATMs subbing for bank tellers. This means, says Toffler, that "you as an individual are insourcing while companies are externalizing labor costs. It may not necessarily be all bad.
"Standard economic relationships are being stood on their heads," he continues. "Buying a washing machine isn't so much consuming but making a capital investment that increases your capability to substitute non-monetary activity for monetary activity. That is, I'm doing it myself rather than buying it from the outside. It's increasing prosumer output."
