No Result
View All Result
SUBMIT YOUR ARTICLES
  • Login
Wednesday, October 1, 2025
TheAdviserMagazine.com
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal
No Result
View All Result
TheAdviserMagazine.com
No Result
View All Result
Home Market Research Investing

5 Conversations to Test Whether Your Asset Manager’s AI Adds Value

by TheAdviserMagazine
4 weeks ago
in Investing
Reading Time: 4 mins read
A A
5 Conversations to Test Whether Your Asset Manager’s AI Adds Value
Share on FacebookShare on TwitterShare on LInkedIn


Artificial intelligence is hot and transformative, reaching far beyond tech into the investment industry. With so much hype, there is a risk that AI is being used more as a marketing gimmick than as a genuine tool to improve investment strategies. Building on a CFA institute overview of how data science and AI are entering investment management[1], this piece takes the perspective of asset owners and consultants.

I offer 5 critical conversations to cut through the noise and uncover the real value of AI in investing. While written with asset owners and consultants in mind, individual investors can also use these questions when evaluating their own asset managers or advisors.

Artificial Intelligence (AI) covers systems that perform tasks requiring human intelligence, such as pattern recognition, prediction, or text generation. Here I use AI to mean techniques, from machine learning to generative models, that go beyond linear rules-based quant models.

Common sense remains the best guide when selecting an asset manager. These 5 conversations can help separate substance from buzzwords, clarifying whether AI is truly adding value. Some questions clarify experience with systematic investing; others help spot “old wine served in new bottles” and assess its role in future client interaction.

1. Definition and Scope: How Does Your Manager Define AI in Investing?

How do you define AI in your investment process, and which specific tools or techniques, such as machine learning, natural language processing, or alternative data, are used?Ensures AI is clearly defined and provides a solid basis for the rest of the discussion.

How does AI-driven investing differ from your systematic rules-based strategies, and where do they overlap?Tests whether AI adds unique value or repackages existing approaches.

2. Organization and People: Who Runs AI at Your Asset Manager and How Are Teams Structured?

How is AI embedded in your infrastructure, including data pipelines and compute resources?Reveals the robustness of the AI setup and commitment to execution.

How is AI organized and led in your team and firm, and what resources, and mix of skills (AI specialists vs. finance experts) support it?Assesses leadership, culture, and long-term investment in people and technology.

3. Experience and Added Value: How Long Has AI Been in Use, and What Has It Contributed?

Since when have you been using AI in your investment process, and how has its weight changed over time?This makes it specific and concrete.

How do you measure the specific contribution of AI to the strategy’s performance? Can you show how AI decisions have improved results versus a traditional approach?Evaluates accountability and evidence of value added.

4. Risks and Limitations: What Are the Pitfalls of AI in Investing?

What have you learned from episodes such as the August 2007 quant crisis, or the LTCM blow-up?  Not everyone knows these events. Knowing quant history helps to prevent making the same mistakes again.

What are the limitations of AI, and where might it hurt performance?This is a useful check on the manager’s critical thinking.

5. Outlook: How Will AI Shape Asset Management and Client Communication?

What do you think of past AI winters, when progress stalled for a couple of years before taking off again? Could this happen again, and how would you deal with such a winter?Explores preparedness for cycles of innovation and stagnation.

How much of your client interaction (newsletters, reports, insights) is generated by AI versus by humans?Reveals the role of AI in communication and transparency.

Finally, ethics cannot be ignored. Asset managers should have safeguards to prevent bias, opacity, or misuse of data. Responsible AI use is as important as performance. AI is powerful, but not magic. Having these 5 critical conversations and asking the right questions helps reveal whether it truly adds value or simply serves as the latest buzzword on an unchanged process.

For individual investors, raising these same questions with your own asset manager or advisor can help ensure AI serves your long-term goals of capital preservation and growth.

Pim van Vliet, PhD, is the author of High Returns from Low Risk: A Remarkable Stock Market Paradox, with Jan de Koning.

Link to research papers by Pim van Vliet.

[1] Data science and AI: A guide for investment managers | CFA Institute

If you liked this post, don’t forget to subscribe to the Enterprising Investor.

All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Image credit: ©Getty Images / Ascent / PKS Media Inc.

Professional Learning for CFA Institute Members

CFA Institute members are empowered to self-determine and self-report professional learning (PL) credits earned, including content on Enterprising Investor. Members can record credits easily using their online PL tracker.



Source link

Tags: AddsAssetconversationsManagerstest
ShareTweetShare
Previous Post

The Central Planning Arms Race

Next Post

7 Times Bad Financial Advice Is Actually Good

Related Posts

edit post
NEOs ETFs: The new Income machine

NEOs ETFs: The new Income machine

by TheAdviserMagazine
October 1, 2025
0

Introduction: The Rise of Income-Focused Option ETFs In a yield-starved market, income-seeking investors have gravitated toward option-based ETFs—funds that combine...

edit post
10 Bargain Dividend Growth Stocks In Today’s Overvalued Market

10 Bargain Dividend Growth Stocks In Today’s Overvalued Market

by TheAdviserMagazine
September 30, 2025
0

Published on September 30th, 2025 by Bob Ciura The S&P 500 has been historically overvalued (in hindsight) non-stop since 2010...

edit post
Why Investing in Real Estate Notes Might Make the Most Sense Right Now

Why Investing in Real Estate Notes Might Make the Most Sense Right Now

by TheAdviserMagazine
September 30, 2025
0

In This Article This article is presented by Connect Invest. Missed the last housing cycle? You’re not alone. Pending home...

edit post
Why New Construction Might Be the Smartest Play in Real Estate Right Now

Why New Construction Might Be the Smartest Play in Real Estate Right Now

by TheAdviserMagazine
September 29, 2025
0

In This Article This article is presented by Lennar. Most of us were taught that the best real estate deals...

edit post
8 Highest Yielding Healthcare REITs Now

8 Highest Yielding Healthcare REITs Now

by TheAdviserMagazine
September 29, 2025
0

Published on September 29th, 2025 by Bob Ciura Income investors often look to real estate investment trusts, or REITs, as...

edit post
Stay the Course, Mitigate the Noise: Navigating Euro Inflation

Stay the Course, Mitigate the Noise: Navigating Euro Inflation

by TheAdviserMagazine
September 29, 2025
0

The anchoring of inflation expectations is a cornerstone of modern macroeconomic theory and a key measure of central bank credibility....

Next Post
edit post
7 Times Bad Financial Advice Is Actually Good

7 Times Bad Financial Advice Is Actually Good

edit post
Pyxus and tax technology implementation success

Pyxus and tax technology implementation success

  • Trending
  • Comments
  • Latest
edit post
What Happens If a Spouse Dies Without a Will in North Carolina?

What Happens If a Spouse Dies Without a Will in North Carolina?

September 14, 2025
edit post
California May Reimplement Mask Mandates

California May Reimplement Mask Mandates

September 5, 2025
edit post
Who Needs a Trust Instead of a Will in North Carolina?

Who Needs a Trust Instead of a Will in North Carolina?

September 1, 2025
edit post
Does a Will Need to Be Notarized in North Carolina?

Does a Will Need to Be Notarized in North Carolina?

September 8, 2025
edit post
DACA recipients no longer eligible for Marketplace health insurance and subsidies

DACA recipients no longer eligible for Marketplace health insurance and subsidies

September 11, 2025
edit post
‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

‘Quiet luxury’ is coming for the housing market, The Corcoran Group CEO says. It’s not just the Hamptons, Aspen, and Miami anymore

September 9, 2025
edit post
Lyft CEO on the time Bill Gates told him he was making ‘the stupidest decision I’ve ever heard anyone made’

Lyft CEO on the time Bill Gates told him he was making ‘the stupidest decision I’ve ever heard anyone made’

0
edit post
Trump, Comey, and the Long History of the Unelected Government

Trump, Comey, and the Long History of the Unelected Government

0
edit post
Telegram to Let Users Trade Tokenized U.S. Stocks Directly in Its Crypto Wallet

Telegram to Let Users Trade Tokenized U.S. Stocks Directly in Its Crypto Wallet

0
edit post
Government Shutdown and Seniors: What You Need to Know About Social Security and Healthcare

Government Shutdown and Seniors: What You Need to Know About Social Security and Healthcare

0
edit post
9 Ways I Extend the Shelf Life of My Grocery Stockpile

9 Ways I Extend the Shelf Life of My Grocery Stockpile

0
edit post
Trump peace plan boosts Tel Aviv stocks

Trump peace plan boosts Tel Aviv stocks

0
edit post
Lyft CEO on the time Bill Gates told him he was making ‘the stupidest decision I’ve ever heard anyone made’

Lyft CEO on the time Bill Gates told him he was making ‘the stupidest decision I’ve ever heard anyone made’

October 1, 2025
edit post
Government Shutdown and Seniors: What You Need to Know About Social Security and Healthcare

Government Shutdown and Seniors: What You Need to Know About Social Security and Healthcare

October 1, 2025
edit post
Telegram to Let Users Trade Tokenized U.S. Stocks Directly in Its Crypto Wallet

Telegram to Let Users Trade Tokenized U.S. Stocks Directly in Its Crypto Wallet

October 1, 2025
edit post
9 Ways I Extend the Shelf Life of My Grocery Stockpile

9 Ways I Extend the Shelf Life of My Grocery Stockpile

October 1, 2025
edit post
Dollar claws back losses from U.S. government shutdown, turns higher

Dollar claws back losses from U.S. government shutdown, turns higher

October 1, 2025
edit post
Financial Planning Doesn’t Have to Be Intimidating

Financial Planning Doesn’t Have to Be Intimidating

October 1, 2025
The Adviser Magazine

The first and only national digital and print magazine that connects individuals, families, and businesses to Fee-Only financial advisers, accountants, attorneys and college guidance counselors.

CATEGORIES

  • 401k Plans
  • Business
  • College
  • Cryptocurrency
  • Economy
  • Estate Plans
  • Financial Planning
  • Investing
  • IRS & Taxes
  • Legal
  • Market Analysis
  • Markets
  • Medicare
  • Money
  • Personal Finance
  • Social Security
  • Startups
  • Stock Market
  • Trading

LATEST UPDATES

  • Lyft CEO on the time Bill Gates told him he was making ‘the stupidest decision I’ve ever heard anyone made’
  • Government Shutdown and Seniors: What You Need to Know About Social Security and Healthcare
  • Telegram to Let Users Trade Tokenized U.S. Stocks Directly in Its Crypto Wallet
  • Our Great Privacy Policy
  • Terms of Use, Legal Notices & Disclosures
  • Contact us
  • About Us

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Financial Planning
    • Financial Planning
    • Personal Finance
  • Market Research
    • Business
    • Investing
    • Money
    • Economy
    • Markets
    • Stocks
    • Trading
  • 401k Plans
  • College
  • IRS & Taxes
  • Estate Plans
  • Social Security
  • Medicare
  • Legal

© Copyright 2024 All Rights Reserved
See articles for original source and related links to external sites.