Alternative Investment

How fintech is opening the door for alternative retirement investments

By 2025, the fintech industry’s estimated global market value is on track to exceed $300 billion. In fact, fintech has earned its share of press, frequently focused on topics like cryptocurrency and digital-only banks. However, fintech stretches into many other areas, including retirement investing.

I believe retirement investing has been ripe for disruption for a long time. That’s not a knock on stocks, bonds, equities, traditional currencies, or financial advisors and wealth managers. It’s just an honest assessment based on the different needs of yesterday’s investors versus today’s.

How have investors changed? Just a generation ago, most people were satisfied to leave alternative retirement investments to the wealthiest individuals. The average person might have dreamed about investing in fine wine or commercial real estate someday, but he or she knew it wasn’t possible without joining the high-net-worth club.

Now, fintech is slowly leveling the playing field. The average person can own and trade Ethereum, fine art or non-fungible tokens. All it takes is the right type of platform and a surprisingly modest amount of money. According to research from alternative investment firm Rocket Dollar, nearly two-thirds of Americans would earmark more funds toward retirement—if they felt they had more choices. Fintech is making those choices accessible, understandable, and attractive.

In the book “The Disruptive Impact of FinTech on Retirement Systems,” editors Julie Agnew and Olivia S. Mitchell note that retirement is undergoing a revolution. They add that the revolution can be successful. The key to success, according to Agnew and Mitchell, lies in a thoughtful marketplace evolution.

So far, the evolution of retirement-based fintech startups has been a bit more sudden than Agnew and Mitchell might recommend. Despite this, many investors are coming along for the ride. What they’re finding is that fintech can be a gateway to alternative retirement investments in several compelling ways.

1. FINTECH IS DEMOCRATIZING STOCK INVESTING

The democratization of retirement investing has happened with a bit of a jolt. Investment sites like Robinhood instantly removed barriers to entry for countless people. Those were people once locked out of being able to buy or sell stocks easily. No more. Now, a wider net of users can confidently try to grow their wealth by investing in stocks that align with their beliefs.

How do app trading platforms such as Robinhood, Acorns, and Betterment work from the back end? At their core, they’re all basically discount brokerages. However, each of them has created user-friendly experiences that empower individual traders. As a result, those traders can feel more comfortable moving their money around in real time and seeing it grow.

2. FINTECH IS DRIVING CRYPTOCURRENCY EDUCATION

Bitcoin, Ethereum, and other cryptocurrencies have made their way into everyday conversation—and everyday investments, too. Where did the peace of mind and confidence surrounding crypto come from? Fintech founders, as well as gamified approaches that make learning about crypto more enjoyable and less complex.

Cryptocurrency-focused fintech tools can help demystify the crypto buying and selling process. By offering secure digital spaces where consumers can purchase cryptocurrency with ease, fintech businesses can enable people to creatively flesh out their retirement accounts. Best of all, they can do it with a higher sense of financial literacy.

3. FINTECH IS OPENING DOORS TO REAL ESTATE INVESTING THROUGH CROWDFUNDING

One thing fintech does exceptionally well is make crowdfunding feel natural and rewarding. Consequently, many fintech companies are helping investors from all backgrounds put their funds toward commercial real estate purchases.

Being able to buy a percentage of a property at a place such as RealtyMogul enables less risky real estate investing. Plus, though the real estate market can fluctuate, it has a history of stabilizing over time. Therefore, investing long-term in professionally managed, pre-vetted properties can pay off.

4. FINTECH HAS INTRODUCED AND NORMALIZED THE ROBO-ADVISOR

Only a few years ago, it would have sounded far-fetched to imagine that people would trust their retirement portfolios to machines. Not now. AI-driven robo-advisors are rapidly changing the retirement landscape. Their role is to give financial advice tailored to an individual’s tastes. This includes alternative investments.

Consider Wealthfront, a leading robo-advisor. Wealthfront presents a buffet of a la carte investments to choose from. Cannabis. Clean energy. The automated investment service firm makes investing seem more personalized, even as it’s taken the human out of the equation.

The digital age has influenced every industry and especially finance. With fintech, alternative retirement investors are finally getting the chance to explore investment opportunities that weren’t available until recently.


Chalmers Brown is the Chief Technology Officer of Due

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