Alternative Finance Landscape: Roboadvising

Alternative Finance Landscape: Roboadvising

Alternative Finance Landscape: Roboadvising

Monday, December 6, 2021, by Dr. Mariya Yesseleva-Pionka, PhD

At various stages in their personal lives, many entrepreneurs choose to seek the advice of a finance professional to assess risks and recommend financial solutions that could help in the financial decision-making process. Historically, professional advisers or financial planners could be found among lawyers, tax and insurance agents, credit providers, stockbrokers and other financial service providers. As such, it is necessary always to check if all the licenses and registrations are in place before you pay for the services and rely on the advice provided by a chosen financial adviser. A complete financial advice from a selected financial planner typically encompasses information and advice that makes it easier for you to manage investment options, tax implications, insurance policies, education needs, retirement plans and various loans and provides an interconnected financial plan.

 

As the widespread adoption of digital banking continues to increase it is evident that customers will continue to expect more personalised banking services. The myriad banking options shared with customers through their banking applications are making it more challenging to make well-informed financial decisions. Access to professional financial advice has always been associated with a fee payment which gave you access to personalised advice on a diverse range of financial matters. Clearly, for a significant number of people, the fees were considered to be quite high and as a result, not many people could access professional financial advice services. 

 

In today’s digitalised world roboadvising has gained popularity due to lower costs, at scale personalisation, greater accessibility, efficiency and overall, financially inclusive approach. In general lower fees charged by roboadvisors made their service more accessible in comparison to their traditional financial advisors. The process is relatively straightforward, which involves completing an online questionnaire that contains a large set of questions connected with your financial plans, age, risk tolerance level, investment horizons, the amount you are planning to invest, among other granular questions. Upon successful completion of the questionnaire, a roboadvisor will ask you to link your bank account with the roboadvisor’s platform for a more seamless investment experience.

 

There are many online platforms that rely on mathematical computer algorithms to provide recommendations and financial advice to customers with varied financial profiles. Even in the presence of so many benefits, it is essential to be aware of the limitations associated with roboadvising. For many clients, having no face-to-face meetings or conversations could be considered a major hurdle. Roboadvising is still a new landscape, so it is necessary to compare fees and services offered by various roboadvisors.  For instance, check how accessible is the customer support team (e.g., chatbots, emails, phone contact with human advisors), level of management and investment fees charged, types of investment options in order to gauge the level of portfolio diversification, educational material they have on offer, minimum investment amounts, level of customers’ ratings, opportunities to minimise tax exposures, trading costs associated with buying and selling various investments and potential conflicts of interest when it comes to the types of investment products recommended by roboadvisors. Remember, every single outcome in your financial success story is defined by the financial decisions you make.

Author

Dr Mariya Yesseleva-Pionka is Global Certificates Manager at ICSB, a Higher Degree by Research Supervisor at Excelsia College and Adjunct Academic at the University of Technology  Sydney, Australia. Dr Yesseleva-Pionka held teaching and senior academic management positions in Central Asia (Kazakhstan) and Australia. She specialised in general investments, personal and corporate superannuation investments while working for Westpac Banking Corporation and BT Financial Group in Australia. She was invited to join The Housing Connection, a not-for-profit organisation in Sydney, Australia as Treasurer and Board Member from November 2019. Her research interests include entrepreneurial finance, traditional and alternative ways to finance small and medium enterprises (SMEs), corporate finance, policies for the small business sector, innovation and SMEs, FinTechs and Blockchain. Dr Yesseleva-Pionka is the Associate Editor for the Journal of the International Council for Small Business (JICSB). 

So You Say You Want An Entrepreneurial Revolution

So You Say You Want An Entrepreneurial Revolution

So You Say You Want An Entrepreneurial Revolution

Monday, December 6, 2021, by Dr. Norris Krueger

Is it Kepler Time?

So you say you want a revolution; well, you know, we all want to change the world.[i] [ii]

 

2022 is ICSB’s Year of Revolution. We have been witness to no less than four Copernican revolutions in how to develop entrepreneurs and entrepreneurship. In each case, we have already had our Copernican moments. But would Copernicus be Copernicus without those like Kepler who fought to prove their essential value?  As a field, the time has now come to find and support our Keplers.

Copernicus proved what many had already suspected: The earth travels around the sun, not vice-versa, despite our evident lived experience. A great triumph for science, yes, but his insights did not change the world until Kepler figured out how to make it actionable by demonstrating the regularity of planet orbits.

Entrepreneurship has already had our Copernican moments; the time has come to empower a generation of Keplers. Everywhere we look, we see “entrepreneurs” and “entrepreneurship” – yet in reality, the quantity of entrepreneurial activity has been in decline for decades.

TESLA for our time: Taking Entrepreneurship Seriously by Losing Assumptions[iii]

Our own lived experience about entrepreneurs and entrepreneurship is often as wrong it is about celestial mechanics. Entrepreneurship is both a consequence and driver of complex dynamic adaptive systems where simple linearities are rare. To use an apt analogy, local economies are far more like a messy rain forest than a tidy, organized farm.[iv] Too often, our experiences lead us in the wrong directions. Just as the persistent myths and misconceptions about entrepreneurship resonate too often with our intuitions, the critical leverage points for growing entrepreneurs can be maddeningly counter-intuitive. That means letting go of well-entrenched assumptions about entrepreneurs and entrepreneurship. Losing our most cherished beliefs is never easy, but the rewards will be brilliant.

There are no less than four Copernican revolutions in how to grow healthy entrepreneurs and healthy entrepreneurship. Yet entrepreneurship is lionized but not embraced. Each month I will take a deeper look at these:

            1) Entrepreneurial education and learning

            2) Lean startup, design thinking, etc.

            3) Bottom-up, outside-in entrepreneurial ecosystems

            4) Social and sustainable entrepreneurship

We need to embrace all four if we are to realize the entrepreneurial potential of our communities – all of our communities. That we need to embrace if we are to realize the entrepreneurial potential of our citizens – all of our citizens.

We will likely have to storm a few barricades for the entrepreneurial revolution to succeed. Will you join ICSB and friends? Then, we will give John Lennon the final word: Don’t you know it’s going to be all right?

 

ICSB Entrepreneurship Revolution series continues with Dr. Norris Krueger.

[i]     Lennon, J & McCartney, P (1968) “Revolution”. Sony Music Publishing (with apologies for the liberties).

[ii]    Stay tuned for a “Keplerian” entrepreneurial update of this Beatles classic…

[iii]    ICSB CEO Ayman El-Tarabishy has dubbed me the “Tesla of entrepreneurship”; it seems only appropriate to leverage the meme

[iv]    e.g, Hwang & Horowitt’s seminal 2012 book, The Rainforest; also Brett’s 2020 Admired Disorder)

Why Corporate Entrepreneurship And Why Now?

Why Corporate Entrepreneurship And Why Now?

Why Corporate Entrepreneurship And Why Now?

Monday, December 6, 2021, by Dr. Alex F. DeNoble

While conversing with a colleague recently, we somehow segued into a discussion about the concept of “punctuated equilibrium” (PE).  He is an educator, and he was talking about the need to adapt our approaches to providing meaningful and impactful learning experiences for our students.   Afterward, I began to dig deeper into the concept of punctuated equilibrium.  I learned that the term evolved from paleontological literature. Scientists use this term to make sense of how a sudden exogenous factor can change the status quo of an entire ecosystem. In paleontology, they refer to dinosaur life before and after the sudden interruption caused by an asteroid striking the earth.  Alas, some life forms went extinct because they could not adapt, while others flourished as they adapted to the new status quo. 

 

Today, as a global society, we are faced with our form of punctuated equilibrium event brought on by a confluence of exogenous forces led by the COVID-19 pandemic and enhanced by intensified global concerns about the environment and climate change and demands for social justice through meaningful diversity equity and inclusion. 

 

As I thought about it more, I began to divide the world into three distinct periods: 1) conceptually life before COVID-19; 2) life during COVID-19; and 3) an emerging “new normal” life as we learn to live with COVID and its many new variants. This new normal will profoundly affect how we will live, work and play in the near term future. 

 

Like the dinosaurs, many companies went extinct during COVID -19 because the impact was too sudden and they could not react fast enough to survive.  But for those companies and entrepreneurs who were able to hold on during quarantines, social distancing, and institutional closures, the challenge is not over. It has only just begun. 

 

Now companies, both large and small, are anxiously trying to figure out what their own new normal will look like. No longer can they rely on the adage of “If it worked for us in the past, it would work for us in the future.” Instead, companies need to rethink their business models, processes, and traditional customer markets.  What is needed now, more than ever, is the corporate entrepreneur, the innovator, the maverick initiator of change in an organization. 

 

In this introductory article, I underscore the urgency for individuals with an entrepreneurial mindset and drive to reimagine our work environment and the markets that companies currently serve.  Because Corporate Entrepreneurship is a complex process, it requires individuals who can draw on their confidence in their abilities to navigate the organization’s hierarchies and roadblocks.  In addition, such individuals will need to develop effective social skills to overcome the obstacles that can impede their progress towards introducing new business and process ideas.  In the months ahead, I will offer short articles on insights I have gained about Corporate Entrepreneurship through my research and interviews with many amazing people who have successfully navigated the corporate maze to bring their ideas to life. I hope you will enjoy the ride as much as I want to share my thoughts with you on this most critical topic. Until next time……

Industria 4.0 y Pymes manufactureras en Latinoamérica Entrega 1

Industria 4.0 y Pymes manufactureras en Latinoamérica Entrega 1

Industria 4.0 y Pymes manufactureras en Latinoamérica Entrega 1 –

Entrepreneurial Revolution Series

Monday, November 22, 2021, de Dr. Rubén Ascúa

El nivel de difusión de las nuevas tecnologías involucradas en la llamada Industria 4.0 (I40) es aún incipiente en América Latina y en particular en pymes manufactureras. La I40 presenta dos dimensiones, por un lado, la política descendente en la que los gobiernos incentivan al sistema productivo a adoptar los motores de esta revolución tecnológica y, por otro, la dimensión empresarial impulsada por las grandes empresas transnacionales y la red de participantes pymes en sus cadenas de valor. Este artículo encuentra que las principales motivaciones de las PYMES analizadas que la introducción de estas nuevas tecnologías está vinculada a la necesidad de encontrar soluciones, en términos de mejora de la eficiencia en los procesos, mayor calidad de los productos y servicios a los clientes y proveedores. Por otro lado, el cambio que supone la digitalización, plantea un salto cualitativo para las PYMES lo que les obliga a replantear su funcionamiento y en el que es imprescindible la interconexión y actualización dinámica de las competencias de sus recursos humanos.

 

Desde fines del siglo XX y comienzos del siglo XXI, en un marco de fuerte globalización y reconfiguración de la fisonomía del capitalismo de base industrial imperante en las décadas precedentes, se aprecia la transición hacia una etapa donde el uso masivo y difusión de nuevas tecnologías impacta fuertemente en la dinámica social y económica. Esta transformación en los escenarios productivos es conocida recientemente como “Cuarta Revolución Industrial”, o Industria 4.0, en tanto cuarta mega etapa de la evolución técnica-económica de la humanidad desde el inicio de la Primera Revolución Industrial.

 

El concepto “Industria 4.0” surge en Alemania a comienzos de la década pasada como emergente de la iniciativa del gobierno federal alemán de diseñar un programa de mejora de la productividad de la industria manufacturera del país. El término Industria 4.0 fue presentado por primera vez en la Feria de Hannover de 2011.  Desde la academia se ha comenzado a prestar atención a la I40 de manera reciente y como reacción a la dinámica impuesta por las dos dimensiones antes señaladas. En particular se destacan los informes de consultoras como McKinsey, BCG, Deloitte, entre otras que a nivel global y desde la consultoría han comenzado en los últimos diez años a seguir básicamente la cadena de decisiones e inversiones en tecnologías I40 por parte de las más importantes corporaciones del mundo.

 

El término industria 4.0 se refiere a un nuevo modelo de organización de los procesos productivos y de control de la cadena de valor con eje en las tecnologías de la información y dispositivos comunicados de manera autónoma. Se parte de la posibilidad de la configuración de fábricas “inteligentes” que integran lo físico con lo virtual, lo que supone la articulación de sistemas computacionales y procesos manufactureros, el despliegue de decisiones descentralizadas y mecanismos de optimización “auto organizativos” (European Parliament, 2016).

Autor

Dr. Rubén Andrés Ascúa – Rector de Universidad Nacional de Rafaela

 

PERFIL

. CONTADOR PÚBLICO NACIONAL – Universidad Nacional del Litoral – Argentina.

. LICENCIADO EN ECONOMÍA – Universidad Nacional de Rosario – Argentina.

. Magister y Doctor (PhD) en Economía – PW University San Diego – California – EEUU.

 

Actual:  Profesor en las Universidades Tecnológica Nacional, de General Sarmiento y del Litoral en Argentina; y en la de Ciencias Aplicadas de Kaiserslautern, en Alemania. Presidente de la Asociación Civil Red Pymes MERCOSUR. President of  International Council for Small Business (ICSB 2014-2015). Director de A&M Ciencias Económicas.

 

Behavioural Finance and Generation Z

Behavioural Finance and Generation Z

Behavioural Finance and Generation Z

Tuesday, October 26, 2021, by Dr. Mariya Yesseleva-Pionka, PhD

The global online connectivity has soared from the onset of the COVID-19 pandemic as the world was forced to rely on technology to maintain communication and the exchange of information. The business models of the existing and new businesses had to be re-evaluated to factor in the importance of having an online presence. Moving forward, entrepreneurs and MSME owner-managers and the corporate sector have to assess the benefits of the hybrid business models and hybrid work arrangements for their staff members. Generation Z represents a significant group of the current workforce globally and they also actively seek various investment options. Members of Generation Z were born between 1995 to 2010 and, according to a report published by Mckinsey Consulting Company,[1] this is a “hypercognitive generation”, which is searching for “truth” and “individual expression”. Every generation has unique identifying characteristics and approaches to personal finance and investments.

 

A new research study results by Barclays Smart Investor[2] demonstrated that Generation Z looks at the short-term investments that promise high returns. One quarter (25%) of Generation Z investors are checking the performance of their investment portfolio, and 17% are trading on a frequent basis which is not surprising, due to the easy access to smart mobile devices. Most importantly, 16% of the respondents are engaged in speculative investments. This could have a detrimental effect on their future lifestyle if the risk exposure is not minimised. High-risk investment strategies are not suitable for everyone. There is also a common misconception that Generation Z could try to take on higher risk just because of their young age, as they have more time to make up for the potential losses. It is vital to comprehend the overall impact on investors’ lifestyle, financial and mental health, requirements to work harder and longer hours, and unnecessary stress and wellbeing.

 

It is vital to understand the importance of diversification and the creation of a well-balanced investment portfolio. When assessing any investment portfolio, it is crucial to take into account two broad types of risk: systematic risk and unsystematic risk. The systematic risk refers to the economy-wide risk, and all investors in the market are exposed to it. Thus, it is essential to assess current economic conditions and how they might affect your investment choices. The unsystematic risk is also known as a firm-specific risk as it directly relates to the firms investors monitoring for the potential investment. Changes in management, product and brand reputation, the introduction of the new project could represent some of the examples of the effect on the firm performance. Generation Z was introduced to technology and investment opportunities at their fingertips from a young age, due to the rapid developments in finance and technology, which was not the case for older generations. The ease of use and accessibility of the online investment options should not cancel detailed research and assessment of the potential risk involved in the investment options and the long-term effect on financial wellbeing.

 

[1] https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/true-gen-generation-z-and-its-implications-for-companies

[2] https://www.barclays.co.uk/smart-investor/news-and-research/investing-insights/rise-of-the-gen-z-investor/

Author

Dr Mariya Yesseleva-Pionka is Global Certificates Manager at ICSB, a Higher Degree by Research Supervisor at Excelsia College and Adjunct Academic at the University of Technology  Sydney, Australia. Dr Yesseleva-Pionka held teaching and senior academic management positions in Central Asia (Kazakhstan) and Australia. She specialised in general investments, personal and corporate superannuation investments while working for Westpac Banking Corporation and BT Financial Group in Australia. She was invited to join The Housing Connection, a not-for-profit organisation in Sydney, Australia as Treasurer and Board Member from November 2019. Her research interests include entrepreneurial finance, traditional and alternative ways to finance small and medium enterprises (SMEs), corporate finance, policies for the small business sector, innovation and SMEs, FinTechs and Blockchain. Dr Yesseleva-Pionka is the Associate Editor for the Journal of the International Council for Small Business (JICSB). 

Investment Choices and The Power of Gold Shield

Investment Choices and The Power of Gold Shield

Investment Choices and The Power of Gold Shield

Tuesday, September 21, 2021, by Dr. Mariya Yesseleva-Pionka, PhD

The Bretton Woods system of monetary management was created to establish an international currency regime. The United Nations Monetary and Financial Conference took place in 1944 at the Mount Washington Hotel in Bretton Woods, New Hampshire. At that time, the delegates from 44 countries established two significant institutions – The International Monetary Fund (IMF) and International Bank for Reconstruction and Development, now known as the World Bank Group. It took a long time and only in 1958, the Bretton Woods system was in full operation. The responsibility of the United States was to keep the price of gold fixed at USD 35 an ounce and make sure the supply of dollars was at adequate levels to maintain future gold convertibility, as the gold was the basis for the U.S. dollar. Participating nations were required to settle international balances in dollars. The Bretton-Woods system did not last long and officially ended in 1971 when President Nixon confirmed that the United States would not continue exchanging gold for the United States Dollar, mainly due to the fact that at that time, the U.S. balance-of-payments deficits contributed to the level of dollars in circulation surpassing the level of U.S. gold stock[1].


Is gold still an attractive investment 50 years later? How has the price of gold been fluctuating over the years? The price of gold is affected by three important factors- supply, demand conditions and investors sentiments. Gold is one of the precious metals that has been a subject of great attraction for investors worldwide. For many, the gold represents a treasured investment and demand for gold is exceptionally high during times of economic and financial crises, such as the Great Depression, Global Financial Crisis and the most recent COVID-19 global pandemic. The supply of gold also has an impact on the price of gold. Gold mining has been continuing for centuries and one could assume that, if there is a higher supply, the price should be lower. This is not always the case as the increasing demand for gold is explained by the growing number of jewellery items, the higher level of gold added by central banks to their reserves and gold investments in commodity markets, with many investors choosing to have gold in their investment portfolios as a shield from unstable economic circumstances.


In 2020, during COVID-19 global pandemic, the price of gold was driven to new heights, reaching above USD 2,000 per ounce. Due to volatile economic conditions worldwide, investors rushed to choose gold and other precious metals as a reliable and recession-proof store of value, further driving up the price of gold. Another contributing factor to the surging price of gold was the severe disruption in the gold supply chains worldwide, due to the pandemic restrictions with the decreased production levels, deliveries and suspension of work in refineries. Nevertheless, to this day, gold is a well-known investment choice for diversifying investment portfolios and it is used it as a shield from uncertain economic conditions.



[1] www.federalreservehistory.org/essays/bretton-woods-created

Author

Dr Mariya Yesseleva-Pionka is Global Certificates Manager at ICSB, a Higher Degree by Research Supervisor at Excelsia College and Adjunct Academic at the University of Technology  Sydney, Australia. Dr Yesseleva-Pionka held teaching and senior academic management positions in Central Asia (Kazakhstan) and Australia. She specialised in general investments, personal and corporate superannuation investments while working for Westpac Banking Corporation and BT Financial Group in Australia. She was invited to join The Housing Connection, a not-for-profit organisation in Sydney, Australia as Treasurer and Board Member from November 2019. Her research interests include entrepreneurial finance, traditional and alternative ways to finance small and medium enterprises (SMEs), corporate finance, policies for the small business sector, innovation and SMEs, FinTechs and Blockchain. Dr Yesseleva-Pionka is the Associate Editor for the Journal of the International Council for Small Business (JICSB).