Retirement planning is not the sexiest topic in the world, but we all have to think about it at some point. And it is a significant business. Depending on which research firm you quote, we’re talking about a $36 trillion to $50 trillion global market.
The problem with retirement plans is that investments are primarily controlled by third parties with little to no transparency, and it is often unclear how you’ll benefit when it comes time to collect the payouts from your plan.
Today Auctus — a smart contract-powered retirement planning platform — announced that it is looking to change all that by bringing blockchain technology to the industry.
Auctus combines traditional and cryptocurrency assets, using smart contracts to eliminate intermediaries in the retirement planning process, thus reducing or even eradicating fees.
“After having entered personal data (such as age, wage, personal circumstances, etc.), as well as having chosen a risk profile based on the user’s investment experience, the user can make various decisions,” Actus CTO Daniel Duarte told me. “These include a choice of template portfolio versus individual portfolios. Template portfolios are standardized portfolios with similar risk metrics to traditional retirement plans and only a low amount of cryptocurrencies. Individual portfolios are very flexible and have higher risk. This is more suitable for experienced savers, or savers with cryptocurrency experience. Some cryptocurrency investors have never held traditional assets.”
By using distributed ledger technology, Auctus provides transparency across the entire investment process, which allows it to be owned and managed by its community. As it is built on Ethereum, financial products and services can be traded using its token.
On the one side, you’ll get access to financial experts who are paid in AUC tokens for their advice — if it turns out to be sound. When the expert provides portfolio suggestions and predictions, users pay only when those predictions are correct.
In that sense, the token is designed to incentivize and reward good performance and good behavior on the platform and give users greater peace of mind.
But how does Auctus guard against users (who may have little knowledge of financial matters) making the wrong long-term decisions?
“By creating an initial personal risk profile when the user registers, we classify users according to their experience,” Duarte said. “Certain features (such as high volatility portfolios) are disabled for inexperienced users. We have the analytic tools needed to recognize risk metrics in an easy to understand way, as well as robo-advisory to choose the appropriate portfolio. Once the portfolio is set up, our platform advises users to hold a passive long-term strategy with high diversification (including cryptocurrencies) and stay away from day-to-day emotions. We believe low fees, the power of compounding, diversification, and exposure to cryptocurrencies, with automated (passive) portfolio rebalancing is an ideal way to reach long-term targets.”
Retirement savers on the Auctus platform can use a combination of community advice and automation to build their own plan. The system provides robo-advisory solutions and a full analytics platform to help make effective decisions. The blockchain offers a permanent track record of portfolio allocation suggestions and robo-advisor predictions, and it lets users compare expected versus actual returns.
Bond portfolios, stocks, and cryptocurrency investments can be optimized through the platform, which means Auctus users can trade both cryptocurrency and any tokenized traditional assets from a single interface. In this way, Auctus allows retirement planners to virtually upload their existing retirement plan, such as their 401k/IRA plan.
So what’s next for Auctus?
“The next steps for Auctus are the release of the alpha version of the platform in February 2018 and the token generation event in March 2018,” Duarte said. “Later this year, the beta platform will be released. We are also working on establishing more strategic partnerships, which include traditional companies from the retirement industry, as well as other cryptocurrency projects.”
Auctus’ token sale (AUC tokens) starts on March 27, 2018 and is open to global users, excluding those in the U.S. and Singapore (residents, green card holders, and citizens) and residents of Gibraltar, Kuwait, South Korea, and the People’s Republic of China.