Robo financial advisors - the new role of AI/ML

With recent increasing exposure of retail investors to algorithm trading, machine learning is providing reaping benefits to investors with unbiased recommendations, faster data access for new untapped markets and personalized portfolio advises. Until, very recently, the use of AI or ML is not accessible to retail investors but since early 2018, AI-backed robo advisors are started creating new buzz and successful in bringing some good results.

In machine learning, the data processing is multi-dimensional, and the data can be processed at an astronomical pace to provide investor instant data due diligence, which is the key for investor. The AI-backed robo financial advisors mostly depend on surveyed investor data in calculating risk tolerance, apply personal attributes, and map to historical financial institution performance. These robo advisors become increasing accurate in mapping the data since the newer data you feed through the surveys, the better the accuracy will be. The potential of cross market data scavenging using powerful ML or deep learning algorithms is slowly becoming a reality now to further enhance the accuracy of global investment data validation.

Predictive analysis is becoming more accurate with AI/ML predictive smart models since the survey population has no data limits for training the models and more you train the models, the better results they can produce. In U.S, investing plays a major role in millions of retirements planners’ portfolios. Machine learning algorithms do not yield to volatile market conditions in a biased approach like humans and continue to predict the portfolio outcomes on a long-term predictive strategy. This takes the fear factor in biased decisions such as pull high and buy low at the right or wrong time.

With their ability to learn fast from new data, machine learning algorithms will spit out insights at a much faster rate providing avenue for investors to quickly tap into new markets. Every one of us, here know, how expensive is to have financial advisors for personalized portfolio planning but with the increasing accuracy in robo financial advisors, our future could be a 24X7 robo advisor ready to go when we need some advice.

Hope you like the article and chime in with your thoughts in this exciting topic.

Thanks

Kiran Palla