Marc Andreesen famously said a couple of years ago: “In short, software is eating the world.” Now it seems to be eating the investment world in earnest.

Let’s do a little thought experiment. What if investing were essentially free? By that I mean the cost of indexed ETFs on the major global asset classes and the management of highly diversified portfolios rebalanced and tax-optimized. The implications are many but how would this change the way you invest and how would it change the nature of financial services as a whole?

I have been talking about the importance of the cost of investing for some time now. In this post I noted how the expense ratio on the cheapest indexed ETFs were trending towards zero. Not only are the fees on indexed ETFs falling so are the costs of trading and fund management as well.

Herbert Moore CEO of start-up online money manager WiseBanyan has a big think piece up over at Medium talking about how it is that these three cost trends are setting up to make investing essentially free in five years. Adding up all these change Moore notes:

(O)ver the past few years an increase in fin-tech companies have brought increased automation and scalability to the industry. As these technologies mature and new ones are introduced, advisors, brokerages, and fund managers will be able to keep pace with all levels of demand. As a result, not only will investors of all asset levels have access to high quality financial advisory and services, but the primary fees associated with investing will also be driven down to zero.

Costs are important. Moore notes that not everything that financial advisors do today can be automated. There will always been a need for the “human touch” as it were. But the compression on fees is important. As John Bogle wrote in an exchange with Rick Ferri:

Gross return in the stock market, less the cost of playing the game, equals the net return earned by investors as a group. Past. Present. Future.

But they are not everything. Behavior is crucial as well. When I wrote about how “everything is awesome” for investors a couple of years ago I concluded with a caveat about behavior and it remains true:

The full application of technology to the investment world will simultaneously open up novel areas of investment for adventurous investors and simplify the mechanics of portfolio management for the average investor. Investors have to choose which path they will follow. They simply need to recognize that their own, somewhat flawed brains, are coming along for the ride.

The world is always changing and for investors it is changing even more rapidly. It is worth taking a moment to think about how these trends will affect you. For most individuals who really don’t enjoy the process of investing it will be a boon. The challenge as always in investing is to minimize the risk that our analog brains don’t short-circuit us along the way.

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