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AI for investment personalization and the future of financial advisors: will FinScience save them?

Alessio Garzonio

In recent years, Artificial Intelligence has become very popular in the investment world. 

AI-driven solutions are already making financial planning for private investors easier and more personalized, considering users’ specific needs, such as risk profile, investment goals, preferences and financial situation. 

Providing personalized recommendations and insights into the performance of their investments, these solutions definitely help people make informed choices. With their ability to process vast amounts of data and analyze complex patterns and trends, AI algorithms and platforms can truly align with each individual’s unique circumstances. 

By automating the process of analyzing data and making decisions, investors can save money and time they spend researching and analyzing markets, while they can  focus on asset allocation and portfolio diversification.

By leveraging AI-driven strategies and identifying potential risks before they even occur, investors reduce human mistakes and missed opportunities.


The JPMorgan case: can human advisors be substituted by AI?

In this new challenging Fintech scenario, the big institutions are not just sitting idle. 

After a recent survey indicating that over half of the institutional traders expect AI and machine learning to revolutionize the future of investments, JPMorgan is investing heavily in AI capabilities.

In fact, the biggest investment bank in the world is developing INdexGPT: a ChatGPT-like software service that relies on AI to select investments for their customers.

Actually, the AI technology underneath is so advanced it could potentially disrupt the traditional role of financial advisors, since the platform can surpass the capabilities of human advisors when it comes to analyze vast amounts of data, assess market trends, and generate personalized investment recommendations in real-time.

With its sophisticated algorithms and data analysis capabilities, IndexGPT can automate investment advice and portfolio management, providing investors with efficient and cost-effective solutions. 


A solution by FinScience to reconcile AI and financial advisors

If Ai and personalization are a trend in investments, FinScience is willing to make it last, involving the main characters of this story: investors and advisors.

As a matter of fact, FinScience is launching its own solution dedicated to financial advisors, wealth managers, and private bankers to guide in constructing Direct Indexed portfolios.

With FinScience, financial advisors can build a sophisticated and customized index for clients in a step by step process, following the same process of financial institutions, matching their clients values and interests even more closely. 

The main advantage is that our clients can build AI-based index from scratch and investors don’t need to compromise when building their own portfolio.

Through AI, we are planning to save financial advisors from AI!


Direct Indexing: what it is and why it is getting bigger

Direct indexing is an investment strategy where an investor holds individual stocks that make up an index in their own account directly, instead of using a mutual fund or ETF. 

Direct indexing is primed to grow at an annualized rate of over 12% over the next five years, faster than traditional financial products, such as mutual funds, ETFs, and separate accounts.

In the last few years, eleven major investment companies  – including Goldman Sachs, BlackRock, Fidelity and JP Morgan – have made 12 big acquisitions in the direct indexing space.