Dec 18, 2020

Three ways AI is shaping wealth management

Wealth Management
Machine Learning
Charlie Burgoyne, Founder and ...
2 min
Three ways AI is shaping wealth management
Charlie Burgoyne from Valkyrie shares how machine learning is transforming wealth management through management and personalisation...

Charlie Burgoyne, Founder and CEO of AI consulting firm Valkyrie, shares how machine learning is transforming wealth management through management and personalisation.

The perception of artificial intelligence (AI) and machine learning (ML) in wealth management is changing. Both those who thought AI had no place in wealth management and those who thought AI would completely take it over were wrong. AI and ML have become essential tools for wealth managers to add value to their business. From selecting and managing the investments themselves to operating a more efficient company and enhancing customer experience, AI is now impacting all facets of wealth management. It provides insights on investments and potential investments, enables the automation of previously tedious tasks and allows for personalized and targeted customer experiences.  

Augmenting and automating investment insights

AI enables data-based decision making for selecting and managing investments. As more and more data are collected from every facet of life, ML models can improve the use of current data sources and also integrate novel and unique data sources not previously used to inform investment decisions. A ML algorithm could use pattern recognition to make market forecasts and find trends not perceptible to humans. ML models could also use natural language processing to automatically summarize financial reports. These automatically produced results can be easily displayed through dashboards and reports, providing timely and actionable insights to decision makers.  

Enhancing recommendations for clients

In addition to allowing for more data-based decision making, wealth managers can also use AI and ML to strategize which products would be the best fit for a client. Clients have different personal preferences, risk appetites and goals. Well-built AI and ML algorithms can create a client profile and use their persona to recommend wealth management products and strategies, creating a more personalized experience.  

Increasing office efficiency and security

ML and AI products can automate manual, time-consuming processes, which frees wealth managers and analysts to focus on higher-level investment decisions. For example, AI and ML algorithms can be trained to automatically generate client reports, monitor and report suspicious activities or answer questions from analysts that might have previously required human interaction.  

AI is changing all aspects of how wealth managers conduct business but not in a way that replaces humans or takes advantage of clients. Rather, AI takes on the behind-the-scenes work, providing automation, efficiency and insights for decision makers. As a result, companies that do not adopt AI and ML technologies may fall behind. AI takes data, expertise and effort to build and train effective models and algorithms, but when this technology is properly deployed, it can increase returns for everyone. 

This article was contributed by Charlie Burgoyne, Founder and CEO of AI consulting firm Valkyrie

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May 7, 2021

Aviva Investors launch $350m global climate credit fund

Joanna England
2 min
 Aviva Investors launch $350m global climate credit fund
The investment arm of the UK's largest insurer, Aviva plc, have said the fund will support companies invested in climate change mitigation...

 Aviva Investors has launched a climate transition global credit fund and has already allocated US$350m in strategic capital.

The funding, which has been provided by Aviva’s UK and Irish multi-asset funds, will be used to invest in companies offering goods and services that support climate change mitigation and the move towards a more sustainable future. 

According to reports, the fund is in line with Aviva’s ESG philosophy on green policies and the United Nations sustainable development goals. It will be handled by portfolio managers Justine Vroman and Tom Chinery, as well as the noted climate specialist, Rick Stathers.   

Aviva sustainable investment strategy

Companies excluded from the investment fund will be those entrenched in the fossil fuel industry, while enterprises that look at solutions to climate-related problems, such as sustainable transport, renewable energy and environmentally conscious lending, will be targeted. 

Aviva Investors confirmed the goal is to capture transition-oriented companies with low decarbonisation and physical impact risk. 

The initiative will also be benchmarked against the Bloomberg Barclays Global Aggregate Corporates Index, investing predominately in investment-grade companies and a small allocation of up to 5% in high-yield bonds.

Colin Purdie, Aviva Investors chief investment officer for credit, explained, "We can't pivot to a lower-carbon world if all we do is rule out the poor performers and only invest in companies that provide solutions to climate change. All companies need to adjust for a warmer, lower carbon world, which is why we felt it was important to use a wider transition lens to capture a larger set of businesses beyond those with obvious green credentials."

He said, "As investors, it is our responsibility to look beyond small pockets of green finance to engage and mobilise the liquidity of the wider credit market to assist in climate transition and the achievement of net zero carbon emissions."

Purdie added, "Companies that don't adjust their business models will be less attractive to investors and will present a less compelling investment case over time. Climate laggards may find that their financing becomes more expensive than that available to climate leaders."

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