The Trillion Dollar FinTech Opportunity

The Trillion Dollar FinTech Disruption

New York City

November 15, 2016

© 2016 Dara Albright Media, All Rights Reserved

@ToTheStoics

@DaraAlbrightMedia

www.Linkedin.com/in/DaraAlbright

Speaker, writer and influencer on topics relating to Market Structure, New Issues, Fintech, P2P and Crowdfinance.

About Dara Albright

DaraAlbrightMedia.com


“Our mission at FinTechREVOLUTION.tv is to produce innovative and entertaining financial content that makes personal finance and retirement planning not only easy to comprehend, but alluring to the average consumer. Only by truly engaging the populous can we even begin to narrow national wealth gap and thwart a looming

retirement crisis.”


Investors28%

Financial Services

Providers32%

FinTech Providers

16%

Platforms/Robo17%

Media7%

Retail 35%

Angel / VC45%

Institutional20%

Investment Bankers

52%RIAs / FAs

23%

CPAs11%

Analysts / Economists

14%

Who’s With Us Tonight

“We are in the midst a worldwide FinTechrevolution that is changing the way we

invest, raise capital, borrow, lend, pay for goods and services and save for retirement. It is reinventing currency, democratizing the flow of capital and giving rise to an entirely

new generation of tech-centric financial leaders”

And it is about to displace the $14 Trillion Retail Retirement Market


The Mutual Fund + Retail Retirement Accounts = A true Love Story

In 1980, the mutual fund industry was valued at $135B and comprised of just 564 funds

The Strapping Mutual Fund The Shy & Reserved Retirement Account

In 1980, the retail retirement account industry was in its infancy. The combined IRA and 401(k) industry was valued at just $25B


President Reagan signs the Economic Recovery Tax Act on his California Ranch on August 13, 1981

The Matchmaker


In 1981, the 401(k) was born out of a tax loophole and the IRA was essentially made UNIVERSAL by raising the tax-deductible contribution to $2,000 for all working taxpayers - regardless of whether or not they had an employer sponsored plan.

The retail retirement vehicle suddenly becomes VERYattractive to the mutual fund industry


Next thing we know, the mutual fund & combined retail retirement industries got married and together ballooned into multi-trillion dollar markets


$241B$636B

$1.3T

$2.6T

$3.7T

$4.8T

$7.3T

$385B $900B$1.7T

$2.4T$3.1T

$4.7T

$448M $2.5B $17B $47.6B $134.8B$495.4B

$1.1T

$2.8T

$6.9T

$8.9T

$11.8T

$15.6T

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1940 1950 1960 1970 1980 1990 2000 2010 2020

Trill

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IRA Assets 401k Assets Mutual Fund Assets

1981

Today the mutual fund industry is valued at over $15 trillion and is comprised of over 9,500 funds. The combined retail retirement market is valued at approximately $14 trillion.

© 2016 Dara Albright Media Sources: Investment Company Institute, Cerulli Associates, US Dept of Labor, IRS Statistics of Income, Federal Reserve Board


This legislative change dislocated America's entire retirement infrastructure and simultaneously created the most remarkable asset distribution channel in the history of finance…

until now


Like the 1980s, we are once again witnessing significant legislative changes, technological advancements and ideological investing shifts –

all in unison

The 1980s

• The PC revolution was in its infancy

• Discount brokerages were on the rise and beginning to invest heavily into technology to make retail investing cheaper & easier

• Asset Shift – capital moving into funds, especially bond funds

• Mutual Funds were the only diversification game in town for retail investors

TODAY

• The app revolution is in its infancy

• Marketplace Finance & Digital Apps are proliferating – making alternative micro-investing cheaper, simpler & more accessible

• Asset Shift - capital shifting from mutual funds & ETFs to alternatives

• Micro-investing Technologies is establishing more proficient diversification strategies for retail


But this time with the marriage between a new generation of “non-exchange traded alternative mutual funds” and “modernized hi-tech retirement vehicles”

HISTORY IS REPEATING

Non-Exchange Traded Alternatives:

• P2P Notes• P2B Products• P2RE Products• New Crowdfinanced Offerings

Modernized “Hi-Tech” Self-Directed IRA


The Financial Services Industry is in the Early Stages of its Greatest Transformation Yet

• It is being driven by:• Quest for yield• A legislative movement to broaden access to alternative products• Advancements in FinTech, particularly in micro-investing

technologies and tools• Changing investor sentiment (fueled by a growing disdain for

conventional assets, traditional investing and essentially, “the system”)

#RETAILISRISING


For years, the smart money has been flocking to alternatives


This is Where the Yield Lives!


The Rules Are Changing Again


A New Universe of Alternative Investment Products for the Masses


Despite the growing demand for alternative assets, the vast majority of retirement assets

remain disturbingly under-diversified in traditional IRAs and in employer-sponsored defined-

contribution plans.


THE CHALLENGE & THE OPPORTUNITY

• Retail investors don’t typically invest with cash they have lying around in checking and savings account. Instead, they invest with retirement dollars.

• A self-directed IRA is needed to invest in alternatives. The self-directed IRA infrastructure was not built to handle a large volume of actively-traded traditional assets.

• You can’t use 1970s technology to distribute and custody assets that are being created and accessed with 2016 technology

• If technology is making new asset classes accessible, diversifiable & affordable, then it is technology that must be used to custody them.


A NEW GENERATION OF INVESTMENT & RETIREMENT PRODUCTS ARE EMERGING


NEW FINANCIAL LEADERS HAVE EMERGEDMore attractive fixed-income alternative products are garnering to mainstream attention

“FinTech will enable all segments of society around the world to get all forms of services without discrimination.” – Ron Suber

Ron Suber, PresidentProsper


LEGISLATION IS BEING USED TO ENGINEER NEW ALTERNATIVE INVESTMENT PRODUCTS FOR THE MASSES

“With new crowdfinance legislation and cutting-edge micro-investing technology, the entire alternative asset universe now has an unprecedented opportunity to penetrate the $14T retail retirement market.”

Brian Korn, Head of Digital Finance PracticeManatt, Phelps & Phillips, LLP


“The StreetShares community brings together business owners in search of funding (particularly veteran owned businesses) and investors looking for both financial and social returns. In the end, business owners get the best deal possible, and investors earn a solid return while supporting American small business -everybody wins.”

Mark Rockefeller, Chief Executive OfficerStreetShares

A NEW RETAIL ALTERNATIVE PRODUCT UNIVERSE IS DEVELOPINGAttractive & meaningful fixed-income alternative products are emerging


NEW PROFIT PARTICIPATION MODELS ARE DEVELOPING

“Crowdfinance is finally making fan-based entertainment financing a realty and providing an opportunity for fans as well cast & crew to participate in production revenues.”

Gene Massey, FounderMediaShares


THE MASSES ARE GETTING EDUCATED

James A. Jones, PresidentIRAeXchange


THE MODERN SELF-DIRECTED IRA HAS ARRIVEDRetirement vehicles more conducive to today’s investing market are being introduced

ISCP technology is changing the game by making it simple and affordable for retail investors to use their retirement dollars to micro-invest across platforms and asset classes.

Todd Yancey, Chief Strategy OfficerInvestor Services


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1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

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SDIRA Assets P2P Assets

This is the first time since 1981 that an emerging asset class has been able to “marry” a retirement vehicle and tap into the retail

retirement market

Will the marriage between P2P and the “modern” self-directed IRA balloon in multi-trillion markets?


@ToTheStoics

@DaraAlbrightMedia

www.Linkedin.com/in/DaraAlbright

Speaker, writer and influencer on topics relating to Market Structure, New Issues, Fintech, P2P and Crowdfinance.

About Dara Albright

Thank you!

Let’s connect:

DaraAlbrightMedia.com

The Trillion Dollar FinTech Opportunity

Economy & Finance

Transcript of The Trillion Dollar FinTech Opportunity