FinTechTalk: Tailored WealthTech - transforming the client experience  

GenAI empowering investment advice 

People increasingly use genAI tools to get investment advice. Although the technology is not fully reliable, it can serve as a front door to conversations about investment with professionals.

 

What users get is the most commonly given advice that shows relevance to their specific situation. Pre-Chat GPT, there was a clear distinction between financial guidance and advice. Chat GPT blurs that line.

 

There are hedge funds that seek to be a step ahead of market trends by using AI to analyse live interactions from social media to gauge market sentiment. 

 

Other developments in wealth tech 

It’s exciting times for private capital markets from wider access to venture capital to secondaries, which increased from almost nothing 15 years ago to $160bn. Also, platforms have emerged providing direct access to private equity and VC funds. Technology is now combined with mandates for pension funds to increase their allocation to private markets. As a result, there is a huge amount of money leaving public markets for private ones and more wealth managers and individuals get access to public money. It will also lower the threshold of the type of individual that can afford to invest in private equity funds through secondaries.  For this to work seamlessly, new technologies and regulations are required.

 

These developments are leading to blurred lines between the public and the private markets. Smaller investors, however, come with increased overheads, which can be offset by automating operational and regulatory workflows. There are also new private market products emerging that cater to increasing demand for consumer fintech and wealth-tech propositions. The compliance burden on financial advice firms is high, especially in the UK, but AI has the potential to improve the economics of that.