From budgeting tools to alternative lending and investment options, payments processing, and philanthropic platforms, we have a lot to gain from the advent of financial technology startups. Learn below about just a few ways in which you can leverage these hot new platforms before they inevitably become common applications for the entire public.

Payments Made Easy

The advent of payments technology has made consumer spending, and all other forms of payment easier, faster, and more secure. Payments technology startups, such as Square, help small businesses get off the ground by adopting easy to use and cheaper credit card payments processing. Instant, reliable transactions are important for day-to-day sales, along with employee payroll processing.

Venmo, a payments app, has provided a “free digital wallet” to the mobile devices of thousands, by allowing friends to connect quickly and securely via Facebook to request and send money to each other in a few taps.

Furthermore, on the consumer side, platforms such as Apple Pay and Bitcoin continue to disrupt the traditional method of pay. When sending money abroad, individuals should consider using money transfer services such as TransferWise to save on international transfer fees.

Lend a Helping Hand

Peer-To-Peer (P2P) business models have fueled a new sharing economy revolution, with many products and services such as home rentals, cleaning services, and anything else under the sun being “uberized.” New FinTech startups have uberized the online lending space, allowing you to access funds through unconventional ways, without the help of big-name banks or a network of established lenders.

Platforms such as U.S.-based LendingClub and Prosper, and U.K-based Zopa have individually issued millions of dollars in loans, joining the rising number of tech unicorns in today’s entrepreneurial space.

Crowdfunding: The New Venture Capital

Investment in crowdfunding platforms may surpass venture capital funding in 2016. Popular sites Indiegogo and Kickstarter have helped thousands of ideas get off the ground – from bizarre video games to social projects and multi-purpose jackets, small businesses and entrepreneurs can now look to the general public for support. Countless other sites such as GoFundMe, which took off by bootstrapping, allow individuals to raise money for any project they like.

Democratizing Investment Products and Services

Robo-advisors continue to gain traction as a provider of investment services once solely accessible to wealthier individuals who could afford their own financial advisor. An online advisor is now available through multiple platforms such as Wealthfront and Betterment. Wealthfront manages your first $10,000 free for a small fee of .25% after that, while Betterment charges .35% to .25% annually or $3 per month. A series of questions, including an individual’s age, determines a user’s risk tolerance, which then determines the portfolio allocation for each specific individual.

If you are unwilling or unable to invest your money yourself, or through a trusted financial advisor, an online platform is a much better way to direct your savings to their most effective use.

FinTech startups aren’t stopping at stock investment, however. For the growing number of Americans who seek involvement in alternative investing and philanthropic projects, the FinTech industry continues to deliver. Take Neighborly, a social venture helping you get involved in the municipal bond market. Neighborly’s Community Investment Marketplace allows you to make an impact directly in your community through safe and lucrative investing.

Budgeting: A Virtual Piggy Bank

As many tech startups target millennials, there’s a significant opportunity for business to facilitate the process of a new generation beginning to save, lend, and invest their money. Millennials don’t simply want to watch the purchasing power of their money wither away in a bank account; instead, they’re using budgeting and educational platforms to help them with a financial strategy. Alongside their robo-advisors, individuals can use budgeting platforms such as LevelMoney and Acorns that automatically track spending and income to give users a daily allowance for the day. This helps people grasp exactly how they are spending their hard earned dollars. Other platforms find creative ways to save you a dime. For example, Paribus scans users emails for receipts following a purchase to get money back in the case of a price drop.

The Bottom Line

FinTech is on the fast track to growth, and it’s not just investors who can benefit from the success. Be sure to stay up to date on the rapidly evolving FinTech sector, which will help drive a democratization of financial tools and services, from payments to wealth management and philanthropy. Ultimately, whether FinTech will take the place of traditional banking entirely is up for debate. However, the plethora of cost efficient and accessible financial tools and services will undoubtedly force the entire financial sector to transform.

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The Economy

It’s difficult to see a scenario where the U.S. delivers sustainable growth

There is a lot of talk about an economic recovery, but do you think the U.S. economy can grow as the rest of the world is slowing down? Multinationals will have a difficult time regardless of U.S. dollar conditions. Domestically, while the unemployment rate is low, the majority of jobs being added are low paying. When you combine that with higher credit card debt levels than 2008, it’s difficult to see a scenario where the U.S. delivers sustainable growth. Additionally, some economists are now doubting Bureau of Labor Statistics numbers. (For more, see: Latest Labor Numbers: Good News for the Market?)

You might be wondering how this relates to high-multiple tech stocks. It’s more related than you might think. The Federal Reserve and other central banks are doing everything in their power to keep the facade glowing. To the credit of these central banks, they have been underestimated to a large degree for many years. Despite weakening global economic conditions, as well as warnings from the IMF and the Bank for International Settlements, you can’t rule out the possibility of the central banks keeping the show running. This is what is creating incredible confusion on Wall Street. Investors and traders simply don’t know when the show stops. When it does stop, high-multiple tech stocks will drop faster than rocks being kicked off the side of a mountain.

Fortunately, there is good news. While the majority of high-multiple tech stocks are not profitable, there are exceptions. Of those exceptions, there are two stocks that stand out in a positive manner. It’s possible, if not likely, that these stocks would take a hit in a bear market. But based on the underlying fundamentals, they would also have strong potential for being the first to rebound, allowing patient and dollar-cost averaging investors opportunities to maximize their long-term gains. Below is the full list of high-multiple tech stocks followed by the positive standouts.

High-Multiple Tech Stocks

Of the 22 high-multiple tech stocks listed below, only eight have delivered profits in their last four quarters, and only six of those have delivered consistent revenue and net income growth over the past three fiscal years. Of those six, only two have shown stock appreciation over the past year. This indicates strength in a volatile market. Based on these metrics, it’s those two stocks that should be on your radar.

The Bottom Line

High-multiple stocks present a high risk, especially in an uncertain economic and stock market environment that is largely being driven by accommodative monetary policies. You might want to consider looking into companies that offer underlying strength in a volatile market.

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The waters of philanthropic giving are murkier than they may appear, and not every organization calling itself charitable truly is. Clients can make a smarter, more fulfilling choice if they work with a savvy advisor.

Taking all this into account, it’s clear that advisors should be involved in this aspect of their clients’ financial lives. But how do you approach that sometimes awkward and difficult conversation?

Why Advisors Should Care about Philanthropy

If advisors are responsible for guiding their clients’ finances, then steering them toward legitimate charitable organizations is part of the job.

Almost 100% of high net-worth-families donate to charity and 75% volunteer their time, according to a study by U.S. Trust. Advisors can help clients find a charity that will use their funds thoughtfully.

Many organizations spend more on marketing than programs and services, and it’s part of an advisor’s job to show clients how to make an informed decision.

By mentioning charity in client discussions, advisors can build a more trusting and holistic relationship. Philanthropy is about more than just money, and involving yourself in this part of your client’s life will lead to a deeper understanding of their needs and goals.

The more you participate in your clients’ charitable giving, the more informed you’ll become of the world of philanthropy. You’ll know which organizations to avoid, which to support and how to make the process as smooth as possible.

How to Approach the Topic

Some advisors get the ball rolling by asking about any past donations, organizations they support or current gifts. Certified financial planner (CFP) Brent D. Dickerson of Trinity Wealth Management said he usually brings up charitable giving when discussing estate planning. Although some clients avoid talking about their mortality, Dickerson said others want to leave a legacy behind.

According to research done by Dr. Russell James of Texas Tech University, people are more receptive to the idea of charitable giving when remembering past times they helped someone else.

Starting from that place could be a productive way to engage clients. While he cares about philanthropy, Dickerson doesn’t discuss it with every client. “I mostly stay away from the subject if I can gather that a client is not charitable nor geared towards being philanthropic,” he said.

This is where some of the awkwardness of the philanthropy discussion comes from. Advisors don’t want to make their clients uncomfortable, and bringing up the topic of charitable giving can come across as an unwanted suggestion to the less charitably inclined. Tread carefully, and get to know your clients before breaching the topic.

Advisors should also let their clients know about the financial benefits of philanthropy, which can be quite substantial. Dickerson said there are multiple ways clients can donate to charity while lowering their tax burden. “Taxes seems to be the number one reason most people choose to leave a charitable estate,” he said. “With this, there are ways of donating appreciated stock, establishing trusts like charitable remainder or charitable lead trusts.”

The Bottom Line

Giving makes people happier, and they are starting to embrace this notion more than ever. With the ubiquity of information on the internet, people are also starting to become more aware and interested in the tax benefits of charitable giving. Embrace your clients’ generous inclinations and make it clear you want to help them achieve their philanthropic goals.

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