Legal services, financial products, and the future

The problem with funds and legal services is that we are stuck in the 19th century.

If you look at how funds are created today, it looks like how cars were built before Henry Ford.  Every time you want to create a fund or issue a new financial product, you have to custom design and build the fund or financial product.  What needs to happen and what can and will happen is that you can build a fund or issue shares or do a loan, you fill out some forms, type up the required information on a computer system and then automatically you end up with a system that packages everything, sends the right information to the regulators and you are done.

Right now if you want to build a hedge fund, you have to spend about USD 100k in legal fees, that means that you can’t realistically raise a fund for anything less than USD 10 million.  Once you standardize everything, then you can make the marginal cost of creating a fund or raising capital to go to near zero.  And once you have that, then it will be like creating the Model T.