Who is Disrupting Investment Management,
By Katina Stefanova, CEO, Marto Capital, and David Teten, CEO, Versatile VC
If investors complained about Wall Street 80 years ago, they’re howling now. Industry players get richer and richer, while many investors see mediocre results after fees.
The late Harvard Business School professor Clayton Christensen found in many sectors that low-end disruptors typically take hold at the bottom of the market and then work up to satisfy more demanding market segments. Think of personal computers, which started as toys for hobbyists and were dismissed by the dominant mainframe and minicomputer companies of the day. The Big Three US automakers dismissed the early small, tinny, and uncomfortable imports from Japan. Examples in investment management include index funds (Vanguard); ETFs (iShares); cryptocurrencies; the original discount brokerages (Schwab, Interactive Brokers); online wealth management (Nutmeg, Betterment, Wealthfront); and gamified investment brokerages (Robinhood).