Sunday, June 4, 2023

Has the end of brokers and financial advisors come?

ChatGPT can turn everything upside down and even the stock market is not safe, Generative Artificial Intelligence (IAG) is the technology of the moment and the new technological revolution to come for experts and intellectuals. The speed at which these types of digital tools are developing and the increasing number of uses of them has generated a global alarm about the danger they may pose to society, particularly in terms of employment.

One of the main debates taking place is how many sectors it may directly affect and how many millions of jobs may disappear. In fact, a recent study by investment giant Goldman Sachs estimated that artificial intelligence puts 300 million jobs at risk worldwide An unprecedented disruption to the labor market that could automate a quarter of the work in the United States and Europe.

Its ease of solving certain tasks is clearly an advance that can save a lot of time for workers in daily operations, but also costs for companies that decide to opt for a more mechanical model. But, applications such as ChatGPT have a significant impact not only on productive sectors, but also on the world of speculation and Those who make their living by advising and moving investors’ money, their days may also be numbered, at least as far as is known., And it is that, with tools capable of bringing together massive amounts of data and offering profitable investment strategies based on them, who needs an intermediary?

The threat and added value of AI

“ChatGPT believes that there is already some momentum in the minds of the whole world to invest in different types of assets. Artificial intelligence is being used to automate certain tasks since a few years and in fact, Today The percentage of operations managed by robots is already very high” ON ECONOMIA points to Ángel Barbero, professor at EAE Business School and general director of the technology company Secture.

In this sense, it is only necessary to take a look on the Internet to find that Bots or trading robots, also known as algorithmic trading or automated trading, These are computer programs that use mathematical algorithms with which to conduct operations in the financial markets. There are people who have been in business for a long time selling these types of methods, which are not risk free nor do they represent a surefire formula for making money, but they do simplify the process.

However, for the expert, Generative Artificial Intelligence such as ChatGPT means a sea change due to the rate at which progress is being made. Whereas earlier it used to take two, three or four years for a tool to make a dent in the sector and change the way brokers and financial advisors operate, today it is a matter of months., Something that is a problem without an adequate technical adaptation process or clear differentiation that provides additional to the services provided.

He said, ‘The most important challenge is to understand what role can be played in favor and in opposition. The big question is this. What added value does the advisor have in relation to the investor? That is to say, if what was done so far was more or less automatic operations, with an easy process to repeat, without using additional knowledge due to experience and knowledge in the field, since all operations are already are getting automated. with whom, A mere operations manager is faced with understanding what he or she can contribute compared to an artificial intelligence that has more brute force and more knowledge than that consultant. Barber explains.

ChatGPT vs 10 Most Popular Funds in the United Kingdom: The Machine Wins

The power to collect public data and develop a profitable investment strategy from it could be a threat to the business model of advisors and brokers, but big investment funds can’t breathe easy or show a button. A recent experiment by British financial comparator Finder has shown how ChatGPT has been able to pick better stocks and generate better returns than many popular managers.

As such, they asked the tool developed by OpenAI to build a portfolio of high-quality company shares, against which benchmarks were drawn from the top ten UK funds to compete. Factors for selection include low debt levels, consistent growth over the past, and assets that create an advantage over competitors. In the simulation performed, the program suggested 38 actions Companies like Microsoft, Visa, Alphabet (Google), Nestlé, Amazon, Netflix, Johnson & Johnson or Pepsi in others.

In the case of eight weeks, between March 6 and April 28, Notional portfolio rose 4.9%, while the country’s top 10 investment funds posted an average loss of 0.8%, Thus, investment vehicles managed by Fundsmith, Fidelity, Vanguard, or HSBC are defeated by artificial intelligence. “Soon, a vast number of consumers will be trying to use ChatGPT for financial gain,” John Osler, Finder’s CEO, said in a statement.

It should be noted that major funds operating globally have been using AI for years, but ChatGPT represents a ‘democratization’ of the technology, making it accessible to the general public without the need for large intermediaries, Whose business is in the commission they charge. investors, especially retailers. “Fund managers use their own algorithms and historical data to work with forward-looking forecasts and see where the money is going. But If it is now done by a device, they are not going to be so valuable, as their method can be easily replicated.“, highlights Angel Barbaro.

Customize or die

“Nevertheless, I do not think human intervention will disappear, but it will shift. For consultants, it is important to rethink their paradigm and focus their added value on the prior process of understanding needs and then automatically Use tools based on artificial intelligence to accomplish operational tasks remotely. That’s the big challenge, they have to train and be more connected to the technical reality than ever before.” adds Barbaro.

In what sense, The profile of advisor is becoming more technical at a frantic pace, feels expert, it needs to rethink how it personalizes the experience for its clients to see how they can make their value more visible in arbitration work. Since, if everyone has access to disruptive technology that can create opportunities in any given market, the function of the arbitrageur has to turn in the other direction.

“They have to work with the customer and personalization. This can result in Focus not so much on delivering the highest profitability as possible, but on delivering sufficient profitability for each case On a client-side basis, to better understand and adapt to investor needs. This is where the human part can continue to play its part”, he concluded.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
Latest news
Related news


Please enter your comment!
Please enter your name here