AI is quickly gaining speed in all industries thanks to its ability to process data. One area it’s really helping is financial planning and investing including robo-advisors.
Robo-advisors are digital investment platforms that automatically create and manage portfolios for investors, making investing more accessible not only financially, but physically too. It removes the traditional barriers of needing a lot of money to invest and/or understanding the market.
Potentially, investors could start investing with little to no knowledge of the industry when using AI for automated investing services.
AI Helps Financial Planners
You may think your financial planner has it all together. They know the market and can make the best decisions for your money.
They can, most of the time.
But, they are human too. They make mistakes and/or irrational decisions. It’s human nature. When financial advisors use the assistance of AI, you have the benefit of the powerful decisions of not only your advisor but an automated system too.
AI watches patterns at a much higher degree than humans can. This puts you at an advantage when it comes to tax efficiency, portfolio rebalancing, and making other investment decisions. AI can provide lightning-fast decisions more efficiently and effectively than a human could.
AI Provides Superior Results with Robo-Advisors
You rely on data not a biased opinion of an individual person. While financial planners must act as a fiduciary (in most cases) which means they must make decisions that are in your best interest, not theirs, there is still a risk.
When you use AI there are no biased opinions. The system relies on data – the data you input as well as data extracted from the market. It looks at patterns, compares them to your overall goals, risk tolerance, and timeline, and creates the perfect portfolio.
AI Helps Everyone Pivot
The market doesn’t always react how we predicted. Even AI can’t predict what the market will do beyond a reasonable doubt. It can use historical patterns to determine what might happen but as we have all seen ANYTHING can happen at any time.
When that happens AI helps financial planners and robo-advisors pivot quickly. When you invest yourself, it’s hard to keep your emotions out of the transaction. A market crash can cause sheer panic, which makes many people make irrational decisions.
AI helps avoid those irrational decisions while reallocating your portfolio. While the crash may not feel good at the moment, using appropriate data, AI can determine what you should do next. Both financial planners and robo-advisors use this strategy to help keep portfolios on track.
AI Investing Saves Everyone Time
Investing takes up a lot of time and oftentimes isn’t an efficient use of anyone’s time, including financial advisors. As they try to juggle many hats, they find it hard to keep up with each client, providing the level of attention they deserve.
AI relieves financial advisors of tasks that could otherwise be automated. This includes monitoring and even some administrative tasks. When financial planners utilize the benefits of AI for automatic rebalancing, they don’t have to spend their time monitoring each portfolio 24/7 to avoid major shifts.
AI gives financial advisors and robo-advisors the ‘heads up’ needed when something big is about to happen. It can look at patterns and historical data and realize when something needs to change. Adapting to the market’s changes happens much quicker with AI because it’s a forethought rather than an afterthought.
All of this boils down to saving financial planners and investors time and time is money. When anyone spends time analyzing and making decisions, it’s an opportunity cost for other uses of their time and money.
Perhaps one of the largest benefits for individual investors is the ability for instant answers when using AI.
The days of waiting for a phone call back from an advisor are behind you. AI makes it possible to have answers right as something happens. If you have routine questions or have issues with routine tasks, you can get access to answers immediately. Companies like Comarch have even gone as far as launching AI powered in-car investment assistants to help keep clients informed on their portfolio performance and allow them to make important investment decisions while on the go.
Investors can even utilize AI to conduct transactions without talking to anyone. The command ‘sell XYZ stock’ or ‘price of XYZ stock’ can give you instant answers and help you make swifter decisions.
Help with Financial Planning
Finally, AI can help individuals and even financial planners with long-term financial planning. Looking ahead 10 – 30 years can seem impossible to predict. How do you know what you’ll need and where you’ll be in that time?
AI helps by using third-party data and historical patterns to see where you should save and what you should do. All you have to do is input your current goals, timelines, and risk tolerance and it does the rest.
It’s like having a crystal ball in front of you telling you what you need to save and/or do in order to have $X to buy a house, pay for college, or retire. It takes the overwhelm out of making decisions that affect your life so far in the future that you can’t possibly know what might happen.
AI can also help you determine how decisions you make now would affect you down the road. If you suddenly decide to make a large purchase or make a large withdrawal from your investment account, how will it affect you down the road? Will it change your timeline, your bottom line, or even ruin your intended goals?
Use AI Investing To Your Benefit
Artificial intelligence is having a major impact on nearly every industry, including the investment management space. As time goes on, we can expect to see more people adopting automated investing tools.
If you’re just starting to invest or even if you’ve been investing for many years, AI can help you make even more informed and valuable decisions. It may save you time, money, and help you make more money than you thought possible.
AI helps free up your time and that of your financial planner. It’s how you can use automated investing tools like 8topuz and the handful of others on the market today. Whether you’re the type that needs human interaction or you can handle working with a computer, use AI to your advantage to move your investments forward.
8TOPUZ ARE THE PIONEERS OF AI-BASED AUTOMATED INVESTING