By James J. Spinelli, ChFC®, AIF® on July 19, 2023August 15, 2023 Artificial Intelligence (AI) has had a drastic effect on our entire society and will continue to impact our lives in ways we can’t predict; and the finance and investing world is no different. With the ability to analyze vast amounts of data in near real time, AI has enabled investors to make more informed decisions by providing insights that were previously not possible. AI is not just limited to analyzing data; it can also be used for risk management, fraud detection, and portfolio optimization. As this technology continues to evolve, we can expect it to play an even more significant role in shaping the future of finance and investing. By studying the short- and long-term impacts of AI in finance and investing, we ensure that GVA’s technology solutions, investment products, and advisor network are as prepared as possible for any disruption that artificial intelligence and machine learning will have on our clients, as well as identifying opportunities to utilize these tools to create better outcomes for our advisor network and clients. One of the most significant areas of impact that AI has had is on the investment decision-making process and portfolio management. AI algorithms can analyze vast amounts of data, recognize patterns, and make predictions with a high degree of accuracy in a much shorter timeframe than traditional algorithms or investment analysis tools. Models built using AI and machine learning provide investors with valuable insights, enabling them to make informed decisions and manage their portfolios more effectively. As real-time market data is fed into AI backed investment models, analysts are fed patterns, trends, and recommendations in near real-time, drastically reducing decision timeframes and allowing investors to take advantage of opportunities in the market as they’re happening. Another advantage is the reduction in human bias. Humans are prone to cognitive biases that can influence their investment decisions. AI algorithms are programmed to make objective decisions based on pure data analysis, eliminating emotional or irrational factors that may affect human judgment. The financial services industry has always been at the forefront of technological innovation. From online banking to mobile payments, the industry has always embraced new technologies that can improve their services and customer experience. There is no doubt that the finance industry will be an early adopter of artificial intelligence, pushing the technology forward with innovation and investment, which can only lead to more opportunities for positive client outcomes. The current state of AI adoption in the financial services industry is a mix of excitement and caution. On one hand, AI promises to revolutionize the way financial institutions operate by automating processes, reducing costs, and improving efficiency. On the other hand, concerns around data privacy and security have made some hesitant to fully embrace AI, as well as a natural resistance to change that makes companies and people hesitant to take recommendations from machines. Despite these concerns, there are already several use cases of AI in finance such as fraud detection, risk management, customer service chatbots, investment analysis and portfolio management. As technology continues to advance rapidly, it’s clear that AI will play an increasingly important role in shaping the future of finance. The benefits of AI in investment decision making and portfolio management are clear. By leveraging this technology, investors can gain a competitive edge by accessing real-time data analysis, reducing bias in decision-making processes, and optimizing their portfolios for maximum returns while minimizing risks. Expect to see a significant amount of news and investment in AI tools moving forward. Because Great Valley Advisor Group has a deep commitment to providing our advisors and customers with the latest technology solutions, we will continue to research artificial intelligence and machine learning and identify opportunities to provide our network of advisors and our clients with the most reliable and innovative technology stack in the industry. We believe that AI is going to revolutionize the way the financial services industry operates, and we couldn’t be more excited for the possibilities to come. Securities offered through LPL Financial, member FINRA/SIPC. Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor and separate entity from LPL Financial.