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Hard to know what to say here. I don't find these arguments especially compelling.
I mean, yes, we know AI is here and it's going to take over the world. I don't see AI customization creating 150mm separate portfolios for 150mm separate retail investors, but maybe I'm missing the author's point.
Financial advisors are already using "really, really, really smart" software to make allocations for clients.
Now, whether or not all fund companies go AI, is another matter...is TROW or Fidelity, for example, going to largely do away with its human analysts in 10 years or so?
Oh, gee, another story about how tech is going to disrupt finance. YAWN.
Other than reducing transaction costs (which can be recouped in other ways, like volume) the mutual fund is not going to disappear b/c of tech. OEFs serve important functions and can be useful investment vehicles for the long term investor.
AI is not the investment panacea - and besides, AI is developed/coded by HUMANS, who are fallable and can have explicit or implicit biases. AI-based *tools* are used by regular investors and traders -- ie, HUMANS, who are fallable, have biases, and usually act emotionally.
What @rforno said. Back to the day of "the computer made me do it"; "the computer made the error"; "the computer says so"; and so forth. After the 90s people became sophisticated enough to realize "the computer" did whatever the human programmed it to do. With AI, well, I can recall the time back in the 80s when a PhD Organic Chemist was incensed because he thought the early AI crowd thought a computer could replace his genius. (They didn't; he just projected his fear that his creativity was simply focused knowledge and not a special gift.) AI, as a buzz word, will get the blame computers used to get. The AI made me do it. The robot did it.
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I mean, yes, we know AI is here and it's going to take over the world. I don't see AI customization creating 150mm separate portfolios for 150mm separate retail investors, but maybe I'm missing the author's point.
Financial advisors are already using "really, really, really smart" software to make allocations for clients.
Now, whether or not all fund companies go AI, is another matter...is TROW or Fidelity, for example, going to largely do away with its human analysts in 10 years or so?
Other than reducing transaction costs (which can be recouped in other ways, like volume) the mutual fund is not going to disappear b/c of tech. OEFs serve important functions and can be useful investment vehicles for the long term investor.
AI is not the investment panacea - and besides, AI is developed/coded by HUMANS, who are fallable and can have explicit or implicit biases. AI-based *tools* are used by regular investors and traders -- ie, HUMANS, who are fallable, have biases, and usually act emotionally.