Technology has made a significant impact on most aspects of our everyday lives. For this reason, it is no surprise that investing is another arena in which technology continues to leave its footprint. Technology has recently become key in enabling development of new pricing models and products for use by the investing public. Within the last several decades, technology has democratized investing, while exerting significant downward pressure on fees.


The most basic investment activity of buying and selling securities is one particular facet of investing where technology has changed the game. Prior to the late 1990’s, investors had to call their stockbroker to place an order to buy or sell securities. Due to a lack of information and transparency about public companies and markets generally, broker commission rates were fixed and very high. Further, investors would not know that status of their investments (profit and loss) until they received their account statements in the mail.


Thanks to the advent of the internet and online trading, investors today can easily access brokerage firms that offer low transaction costs. They can also buy and sell securities online with the simple click of a mouse, and more easily research investments. Brokerage firms have developed apps which allow investors to track investments on smartphones. Investors can now have real time alerts regarding their various holdings and other market- related matters. Investors and investment advisors alike now have the necessary tools to conduct cutting-edge research and analysis on investments.


“Robo advisors” are a more recent technological innovation in the last decade. Betterment and Wealthfront are two such firms which have the ability to construct and manage their clients’ portfolios with the use of algorithms. Taking the human element out of investing has allowed these firms to lower the cost of investing dramatically. Additionally, both firms offer tax-loss harvesting for taxable accounts; Betterment also offers a 401k product that partners with other financial advisors. The robo advisor model has been picked up by other major players such as Schwab and Fidelity, showing that there is a rapidly growing market for tech-based investing.