Every individual wants to create wealth for himself and the future generation. However, with only 26% being financially literate in India, the task is not easy. You may start the wealth creation process, but with limited knowledge and expertise, you are likely to fail.
Therefore, for long-term processes like wealth creation and management, you need to seek guidance from wealth management companies. However, not every available company can deliver the expected returns – humans tend to make mistakes in money matters. An option that has become popular in recent years is using AI technology for wealth management. Is it possible, or is AI for wealth management only a theoretical concept? We are going to discuss the same today.
What is wealth management & its objective?
Wealth management is a comprehensive service that focuses on taking a holistic look at your financial picture, including financial planning, investment management, tax planning, and estate planning. Wealth management objectives vary from investor to investor as everyone is in a different financial situation and has different needs. The common objective is as below:
- Set financial goals and design strategies to achieve those goals
- help you maximize your overall wealth
- Manage finances and investments
- Estate planning – strategies for passing on your wealth to the next generation
AI in wealth management
AI has come a long way in recent years. Now, everything is possible with AI – stock selection to AI-based stock trading. Investors are using it in different areas related to investing, trading, and money management. Let us first understand the need for AI in wealth management.
You can opt for wealth management companies, and the advisor can manage your wealth. However, when it comes to money, you must understand that, at the end of the day, you are responsible for what happens to it. You cannot hand over everything to the advisor and hope he will do the best for you. Advisors are humans and are bound to go wrong, not be efficient, or not do the job efficiently for you.
On the other hand, when it comes to AI and wealth management, you can trust it. There is no human bias or scope for not doing the work efficiently or carelessly. Using AI for wealth management guarantees a significant level of accuracy as it analyzes millions of data points and scenarios.
How is AI used in wealth management?
As mentioned above, wealth management has a range of services, and AI caters to the needs of most of them. Below are some examples of AI used in wealth management:
- Managing portfolio: It is about ensuring that you have the correct asset allocation – from portfolio creation to portfolio management. You can use AI for stock investing – create a portfolio based on your risk profile and investment horizon. AI can evaluate stocks that can fall drastically and will not rise again and ensure you stay away from such companies.
- Risk Management: As mentioned above, wealth management ensures that your wealth maximizes over time. For that, it is crucial to avoid the downside of your investment – minimize the risk. Today, AI systems are advanced enough to act as risk management systems. It is possible because they can scan data points on millions of parameters and do it 24*7. As a result, when you use AI for wealth management, you are the first to be notified if there are any red flags associated with your investments. Jarvis Invest has a highly rated risk management system.
- Tax planning: When you have many assets in your portfolio, tax planning becomes complicated. However, AI tools available in the market can recommend optimal tax planning and configuration to you.
- Robo Advisors: It is one area where AI has already proven successful. AI-based stock trading is possible today because Robo-advisors can give you buy and sell calls. It is not only about trading, Robo-advisors can also create a financial plan for you and tell you where to make the investments.
Artificial Intelligence (AI) can do a lot when it comes to wealth management. However, when you opt for any AI-based service, it is crucial to assess the product – just like you need to evaluate a human advisor.
Jarvis Invest is a perfect example of how AI can help investors. It is used by thousands of investors. If you have not explored it yet – download the app and see the magic of AI.