This AI-powered financial advisor has quickly gained $20 billion in assets
PortfolioPilot, an automated financial advisor, has quickly accumulated $20 billion in assets, indicating how disruptive artificial intelligence could be for the wealth management business.
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| AI-powered financial advisor |
According to Alexander Harmsen, co-founder of Global Predictions, which created the product, the service has gained over 22,000 members in the two years since its introduction.
According to CNBC, the San Francisco-based business collected $2 million this month from investors such as Morado Ventures and the NEA Angel fuel to fuel its growth.
Following the release of OpenAI's ChatGPT, the world's leading wealth management organizations rushed to apply generative AI, launching services that supplement human financial advisors with meeting assistants and chatbots. However, the wealth management business has long feared that human advisors will be obsolete, and generative AI, which utilizes massive language models to generate human-sounding solutions to questions, brings that prospect closer.
Despite the rise of robo-advisors like Betterment and Wealthfront, the advisor-led wealth management industry has expanded over the past decade, with major players such as Morgan Stanley and Bank of America. At Morgan Stanley, for example, advisors handle $4.4 trillion in assets, much exceeding the $1.2 trillion managed via its self-directed channel.
Several providers, whether human or robo-advisor, wind up placing clients in identical portfolios, said Harmsen, 32, who previously cofounded Iris Automation, an autonomous drone software business.
"People have had enough of formulaic portfolios," Harmsen stated to CNBC. They truly desire individualized recommendations and insightful opinions. Regarding advise for the future generation, I believe it is genuinely customized and you have the freedom to decide how active you want to be.
Report cards produced by AI
The business integrates machine learning algorithms and conventional finance models with generative AI models from OpenAI, Anthropic, and Meta's Llama for over a dozen uses across the offering, including forecasting and evaluating user portfolios, according to Harmsen.
According to him, Global Predictions evaluates portfolios primarily based on three criteria: resilience against significant falls, risk-adjusted returns, and whether the user's tolerance for investment risk is met.
By linking their investment accounts or manually entering their stakes into the free service, users can receive a report card-style grade of their portfolio; a $29 monthly "Gold" subscription includes tailored investment advice and an AI assistant.
"We'll provide you with extremely detailed financial guidance; we'll advise you to purchase this stock or switch out that mutual fund you're paying excessive fees for with this one," Harmsen stated.
"It could be as basic as that, or it could be far more advanced advice, such as 'You should think about adding some commodities exposure as you're overexposed to changing inflation conditions,'" he continued.