If you were going to search for a new bank or financial firm to do business with, odds are your search would begin at a venerable old investment firm such as J.P. Morgan (JPM ) or Goldman Sachs (GS ). If you are a bit more cost-conscious, maybe Vanguard or a similar indexing specialist. The point is, you choose some well-regarded insurance or banking firm, with a long history of being in the financial markets, right?
It turns out, plenty of investors and banking customers would turn to the Silicon Valley giants over conventional banks if they offered financial services. And the idea isn’t that far-fetched. They have some pretty big scale behind them and millions of customers. So before you laugh at the concept of a Snapchat retirement advisory service, you may want pay attention.
Nearly Half of Americans
It turns out, a lot of investors and financial services clients are getting fed up. It’s a commonly known fact now that the biggest winners on Wall Street are the banks themselves. Higher costs tend to have two effects. One is making your broker rich. The other is reducing your returns. This is one of the reasons why low-cost indexing has gained popularity in recent years. It’s also the primary reason why many investors are looking to escape the old boy’s network that is Wall Street.
And that has them heading towards the direction of some not-so financial institutions. According to a recent survey by consultancy Accenture, that number is about half of all Americans.