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Old 03-09-2016, 03:11 PM   #21
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Don't underestimate (as the late lamented travel agent industry maybe did) the appeal of giving folks somewhat fewer options at vastly improved convenience and price.
That sounds great. I just don't think investing or crafting a retirement plan is anything at all like buying a flight or renting a hotel room.

To do the later, all I ever needed were the tools that travel agents had access to. Now that I do I don't need the travel agent to punch keys for me. But we've all had the tools needed to manage our own finances for a very long time. A lack of access to more, or even better, tools isn't the thing holding people back.

Don't underestimate the fundamental financial illiteracy of your fellow citizens. No web tool is going to fix that.
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Old 03-09-2016, 09:40 PM   #22
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One way I think software could further disintermediate the consumer finance sector is by making mutual funds obsolete. Instead of paying a fund company 0.2% or more every single year to hold a bunch of stocks for us we can use software to assemble our own funds and hold the stocks directly.

It's not too hard to imagine Charles Schwab creating some code allowing investors to dial in the type of portfolio they want, with as much or as little custom tailoring as they care for, press a button and the system goes out and buys all the relevant stocks.
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Old 03-09-2016, 10:19 PM   #23
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One way I think software could further disintermediate the consumer finance sector is by making mutual funds obsolete. Instead of paying a fund company 0.2% or more every single year to hold a bunch of stocks for us we can use software to assemble our own funds and hold the stocks directly.

It's not too hard to imagine Charles Schwab creating some code allowing investors to dial in the type of portfolio they want, with as much or as little custom tailoring as they care for, press a button and the system goes out and buys all the relevant stocks.
However the issue that makes mutual funds, is that few have the resources to buy the complete set of stocks in the 500 index. In particular with the proper weighting. Now of course if you have 10k the 500 index fund is .05% per year As another comment recall that for most ETFs you can buy a creation unit by transferring the shares that underlie the ETF to the fund and get shares of the fund. Of course again few investors are in a position to do a creation unit.
The point of the mutual fund is to enable diversification for the individual investor of moderate means.
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