The use of AI in investment platforms


We believe investing is personal, and a personalised experience and the human touch cannot be replaced

The past two decades artificial intelligence (AI) has revolutionised and disrupted various industries. The investment management industry is no exception. Investment management platforms in the global arena already use AI to perform and automate compliance and risk management functions, analyse data and trends, and generate reports. From an investment management perspective, it can help to identify investment opportunities and risks in real-time and enhance the overall investment experience.

At Momentum Wealth, one of the most significant benefits of incorporating AI into our investment platform of the future is that it will enable financial advisers to make more informed decisions. AI can analyse copious amounts of data, including market trends, historical data and news articles and use the data to identify patterns and make predictions about future market movements. This capability can help advisers make better investment decisions and minimise risks for their clients. These uses are not limited to financial advisers, but investment managers and other investment platform stakeholders can also greatly benefit from these insights.

In addition to improving investment decision-making, AI can also enhance the overall experience for financial advice practices, discretionary fund managers and clients. AI-powered investment platforms can personalise investment recommendations based on a client’s specific needs, risk tolerance and investment history. This will greatly assist advisers in helping them steer their clients towards reaching their financial goals whilst minimising their investment risk. It is, however, essential that financial advisers still employ sound judgement and their discretion when they use AI-powered applications. We believe investing is personal, and a personalised experience and the human touch cannot be replaced.

Hymne Landman, Head of Momentum Wealth, Momentum Investments

Consider the limits

While there are many benefits to incorporating AI into investment platforms, the potential drawbacks and limitations should be considered. AI algorithms may not always be accurate and there is a risk of making poor investment decisions or deriving insights based on inaccurate or incomplete data. It is therefore important that a comprehensive data strategy is in place as a first step towards an AI-powered platform. The recommendations and insights may also not be suitable for all clients or advisers.

Another important consideration is to ensure that AI is being used ethically and transparently by ensuring data integrity, that models are accurate and valid, and that algorithms are interpretable. This necessitates that clear guidelines and regulations are in place.

The skills you need

Investment professionals who want to effectively use AI in their practice must possess the necessary skills and expertise. These include having a strong understanding of data analysis, machine learning algorithms and the relevant programming languages to support this. However, advisers do not necessarily need to have these skills and expertise; they could partner with investment platforms that have incorporated AI in their businesses and use their expertise to help clients on their journey to financial success.   

Looking ahead, the role of AI in investment platforms is expected to continue evolving rapidly and more widely. As AI technology continues to improve, we can expect to see even more sophisticated algorithms and applications in investment platforms.  

At Momentum Wealth, we are excited about the possibilities of using AI in our investment platform, but we will always make sure that human interactions and interventions are in harmony with technology. Because with us, investing is personal and we will keep it that way.

Momentum Wealth (Pty) Ltd (FSP 657) is an authorised financial services provider. Momentum Investments is part of Momentum Metropolitan Life Limited, an authorised financial services and registered credit provider (FSP 6406).

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