Talk about robots taking over the jobs of stock market fund managers
A story that's doing the rounds today is that Blackrock is laying off employees as they shift to algorithms to allocate funds.
The hot take is that this is another sign of robots taking jobs, this time it's white collar jobs.
That's undoubtedly going to be a major theme in future.
But this is also part of another theme that has played out over the past 20 years -- the collapse of trading costs. Online trading, derivatives and ETFs have been a true revolution.
Alongside it has been the birth and growth of the individual investor.
It now costs virtually nothing to do most types of vanilla trading and ETF costs are in a race to zero and new, impressive ETFs are launching all the time. In FX, costs are miniscule and once regulators clean out some of the bad actors, it's going to be a golden age of trading.
What's next?
There are still some big parts of the money industry where costs need to fall -- traditional banking, credit cards, physical FX (especially retail), and consumer finance -- but I believe that's coming.
What's more is that lots of the innovations from financial markets are heading to main street. Smart contracts, the blockchain, cheaper shipping and ecommerce will depress consumer costs for the coming 20 years.
I expect what's happened in financial markets will head to accounting and law.
