As I started preparing for this column, two troubling sets of thoughts — and one troubling song — came to mind.
First, I thought, "When the editor of Research magazine asked me to write this piece, why did I agree?" I'm terribly cynical about attempts to predict the future, and even professional futurists and industry experts are notoriously wrong about their prognostications. (Remember Ken Olson, the president of DEC, who famously predicted in 1977: "There's no reason anyone would want a computer in their home"?) I can't even predict what will happen in my own life next week, no less 30 years out for our entire industry.
Then I thought about my intense dislike for Hollywood's consistently bleak portrayal of the future. Whether it's nuclear or biological war or terrorism, rapid "tipping point" climate change, asteroid or meteor impact, global famine, malicious super-intelligent computers and robots, or even alien invaders — we end up with a desolate Earth barely supporting a tiny number of hardscrabble human survivors. It's the end of civilization — and the stock market! — as we know it.
Finally, a similarly bleak song came unbidden to my mind: In the Year 2525. This 1969 hit by the duo of Zager and Evans was the No. 1 song in America when Neil Armstrong walked on the moon:
In the year 2525If Man is still aliveIf Woman can surviveThey may find…
Well, in search of what "they may find" in our industry some 30 years from today, you'll shortly see that I'm not nearly as pessimistic as Zager and Evans or Hollywood. And while I'm quite uncertain as to any specific prediction, I'm confident that, in the main, life as we know it — including the importance and necessity of the financial services industry — will indeed go on.
New SolutionsTo begin with, I predict that between 50 percent and 70 percent of the product solutions that will be available 30 years from now haven't been invented yet. Similarly, rather than the pace of technological change slowing down sometime soon, the rate of change and its impact on our industry will continue to accelerate.
For example, within 30 years most of us will carry some kind of small multipurpose device that will be activated and verified by retinal scan. Along with a national ID, it will contain our complete medical history, driving record, credit report, continuously updated investment portfolio and bank balances. Such a universal "iSolution" will negate the need to fill out the same new doctor's form for the umpteenth time; instead, you'll just slip your device into a reader and your relevant records will be instantly transferred. In this way, the informational technology revolution will come full circle to truly serve not just the technically oriented, but the common person as well.
These information technology advances will create both challenges and opportunities for our industry. Some clients will want to be kept fully up-to-date on changes in their portfolios and the markets, and our industry will respond in kind, delivering personalized information updates. If you, as a client, want to see your portfolio in a simple pie chart constantly updated on your iSolution, then that's what you'll get.
Economic & Societal ChangeThe cyclical nature of markets and the economy will remain unchanged as we continue to move through multiple booms and busts over the next 30 years. There will be another bull market or two, a couple of recessions, and a couple of bear markets. In turn, there will be Congressional investigations following the market's next great wave of excess, whether flowing from corporate malfeasance, the introduction of sub-sub-micro stocks, or whatever comes next. The indelible human desire for greater returns, and the average person's misunderstanding of the relationship between risk and return, will continue to be problematic for the industry as fear and greed continue to feed the inevitable cycles of boom and bust. As things get out of balance in new ways, we'll have to figure out how to fix them and reestablish a healthy equilibrium.
