In recent years, Artificial Intelligence (AI) has emerged as a game-changer in various industries, and the financial sector is no exception. With its ability to process vast amounts of data, identify patterns, and make predictions, AI is trying to reshape the landscape of financial planning and investment management, empowering both financial advisors and investors alike. But are we there yet?

AI is driving startups and has the potential to transform the way financial institutions operate. Using real-time market data to get deeper insights and direct investment decisions, AI models could execute trades at a speed and precision never seen before. There are some key areas where AI can optimise processes and improve the overall financial journey of many, however it is still at a very early stage and regulation for these tools in the financial world are even further behind.

According to Jordan Gillies, partner at Saltus, the main areas that AI will assist in the near term -or is currently assisting- are areas such as:

Automatically populating digital fact finds following recorded meetings between advisers and their clients, optimising the experience for both parties

Assessing data to help understand correlation between demographics and ages to determine when or what advice might be useful across a large client base.

Various administrative burdens, like password recovery processes or handling minor administrative tasks.

Assessing advice reports to reduce errors and producing simple reports for minor recommendations.

Compliance: supporting advisers with assessing suitability on an ongoing basis by reducing human error and identifying patterns of personal bias.

Gillies adds that, whilst AI is rarely being used effectively in the financial industry at present, its potential is very exciting. It should drive significant efficiencies in the finance industry, but there’s still some way to go. “So far it’s been steady evolution rather than revolution. As you’ll note from fairly mundane list of the near-term benefits of AI, we’re a long way from the concept of AI being able to replicate a human adviser. We may never get there due to the behavioural elements of how people interact with their money. At present, financial advisers should be more concerned about failing to integrate AI to improve efficiency and increase the quality of service than being replaced by it.”

What is AI (potentionally) doing for the finance industry

Some other areas where it’s starting to be applied are:

• Data Analysis and Pattern Recognition: AI algorithms can analyse enormous datasets with lightning speed, enabling financial advisors to extract valuable insights. By recognizing patterns in market trends, customer behaviour, and economic indicators, AI could equip advisors with a comprehensive understanding of the financial landscape.

AI can’t currently provide regulated personal financial advice. However, AI powered-tools can be used by a professional, chartered financial adviser to support them in providing personalised advice, tailored to individual needs and preferences. Nonetheless, a professional adviser might know the client's history and preferences better, including his aspirations and those of his family, so their input in the process will be valuable. The combination of AI-powered tools and professional experience will probably optimise the planning and advice given to the customers. 

AI-powered tools excel in risk assessment and mitigation by evaluating various factors that could impact investment performance. These tools could analyse market volatility, economic indicators, and geopolitical events in real time, allowing advisers to make informed decisions to protect and optimize their clients' portfolios.

AI algorithms are increasingly being utilised for automated trading strategies, executing trades based on predefined parameters and market conditions. This automation not only enhances efficiency but also minimises the impact of human emotions when making investment decisions. This could lead to more disciplined and consistent trading practices. Nonetheless, an experienced "human" eye can spot trends that repeat throughout history and add valuable insights that the algorithms may fail to take into consideration.

AI-driven portfolio optimisation algorithms continuously monitor market dynamics and adjust asset allocations to maximize returns while minimising risk. By leveraging machine learning techniques, these algorithms adapt to changing market conditions and investor preferences, ensuring optimal performance of investment portfolios. But, as mentioned above, a seasoned investment manager can bring more to the table and interpret the algorithm better for the customer to achieve his personal goals faster and more effectively.

Through sophisticated algorithms, AI can analyse historical data, news sentiment, and macroeconomic indicators to anticipate market movements and make data-driven investment decisions.

AI plays a crucial role in enhancing security measures within the financial industry by detecting fraudulent activities and safeguarding sensitive information. AI algorithms can detect anomalies in transaction patterns, identify potential security breaches, and prevent unauthorized access to financial assets, thereby bolstering the trust and confidence of investors.

By leveraging AI-powered chatbots and virtual assistants, investment management firms can provide personalised customer support and answer queries in real time. This seamless integration of AI technology enhances the overall customer experience, fostering long-term client relationships and loyalty.

Artificial Intelligence in Finance Governance

Monitoring is necessary to guarantee appropriate use and low risk while using AI in finance. Given that financial institutions handle enormous volumes of sensitive data, proactive governance can promote the use of AI in a responsible, moral, and transparent manner.

IBM, one of the biggest developers in digital tools that can also be used in the financial industry, issues a warning on how the advantages of AI must be balanced with its responsible and accountable use, which requires safeguards to ensure ethics, regulatory compliance, transparency, and explainability—so that stakeholders understand the decisions made by the financial institution. By creating oversight and clear standards for its use, AI may continue to evolve as a trusted, powerful tool in the financial industry.

What are AI's challenges in the finance industry?

According to a Forrester survey, 98% of institutions believe artificial intelligence and machine learning can give them a competitive edge and improve their business processes. However, 80% to 85% of machine learning (ML) initiatives fail to launch because of various logistical and managerial problems, indicating that institutions require assistance from IT and AI network professionals to complete AI projects.

Financial organisations deal with sensitive and private data daily, which puts them in compliance with several security and compliance standards in addition to logistics. Any AI solution must be able to safeguard that data and adhere to regional and industry-specific regulations, as finance is a global issue involving a wide range of businesses. A seasoned financial adviser or investment manager can spot the dangers drawing from experience and protect their clients and the organisation while keeping the customer’s goals in mind.

One of the many complicated challenges is the vast volume of data. Institutions must arrange all their data into well-organized channels and structures for Machine Learning to properly forecast and predict markets in line with particular business goals.

AI is transforming investment management and financial planning by giving advisers access to cutting-edge analytical tools, improving investment strategies, and boosting the security and efficiency of the financial ecosystem as a whole. However, implementing change requires making difficult choices, which is where the expertise of professional advisers and their years of experience prove useful. 

AI will play a bigger and bigger part in the future of finance as it develops and innovates, but it is up to us to make sure that everyone who benefits from the change—investors and professionals alike—will do so.

Before letting AI take over your fianances, we suggest you talk to an experienced and qualified professional to make your financies are well taken care of. Compare Wealth Managers offers a free service to help you find a wealth manager. Simply click the orange "start comparing" button to get started.

 How AI is helping Financial Planning and Investment Management

Jordan is passionate about financial education and has spoken at national conferences on the subject. He has specific expertise in helping people ‘re-think’ retirement, as well as assisting business owners preparing for sale. He regularly hosts workshops on both topics for numerous conglomerates and global CEO networks.

You may have also seen his face pop up on on your social media. Jordan is a widely recognised face in the financial world and has amassed a significant following as a result of the financial content he produces and the national press coverage it has received. He was recently shortlisted for the Magic Circle’s ‘Outstanding Individual of the Year’ award in recognition of his efforts to ‘educate the nation’ with regard to their finances. When he isn’t on camera, he is often the first point of contact for prospective clients at Saltus to help determine what type of advice they may require and which of the team is most suited to their needs.

Jordan has been working in the financial services industry for almost 10 years, working at Seven Investment Management prior to joining Saltus in 2020 to focus on the group’s growth strategy. He also has a BA in History from the University of York.

Partner

Jordan Gillies

Saltus started life as an investment management firm in 2004, yet over the years they have realised that providing award-winning investment management is just one of the ways they can help clients achieve their aspirations. Saltus Financial Planning was launched in 2015, with the aim of being an industry leader in providing financial advice, so clients can rest assured their money is being looked after by experts. The Saltus Group now employs over 200 people and have the privilege of looking after over £3.33bn for their clients.

Saltus Financial Planning is a "Chartered" financial planning firm. They are experts at creating financial plans for clients at every stage of life. Their mission is to help you take control of your finances. Saltus can help you map out your financial and life goals, and ensure that you have a plan that will deliver them. They will help you to navigate the complex landscape of the investment world and assist with structuring your investments in a tax- efficient manner. 

Saltus Financial Planning create a personalised and collaborative financial plan with you by listening to, and understanding, your needs and then applying our knowledge and expertise. This not only ensures your money continues to deliver for you but also builds enduring personal relationships based on trust and experience.

As an independent financial planning firm, they are able to provide objective advice that is aligned with your best interests. They can offer the best of both worlds, either selecting from in-house investment strategies managed by Saltus Asset Management or from an alternative provider, depending on your objectives.

Saltus construct and manage portfolios centrally under the direction of the Investment Committee (IC). The IC is the decision-making body responsible for all aspects of portfolio management. Centralising control of portfolios helps them to control risks in the broadest sense and help achieve consistency of outcomes for clients. 


Saltus has a 5-stage investment process: 
1. Asset allocation: Unlike their peers, they do not operate within a constrained fixed asset allocation environment and instead use volatility parameters to guide the risk level of our mandates. However, asset allocation is a significant input and is continually reviewed and updated as markets develop. Allocation is derived from 4 primary sources: The knowledge and experience of our investment team, third party data providers – we use a range of data providers and external analyst, their fund manager network and bespoke, in-house, macro analysis tools.


2. Fund selection: They employ a ‘5 factor’ process to calculate a manager’s average yearly alpha (or outperformance) and importantly, how volatile the manager is in delivering this outperformance. Targeting steady delivery of alpha rather than managers who enjoy the occasional purple patch, then go ‘quiet’ for several years. The more consistent a manger is in delivering alpha, the greater confidence Saltus has in assessing the chances of them delivering this in the future.


3. Portfolio construction: Client portfolios are grouped into 5 core risk bands, characterised by their volatility of returns relative to the equity market. Each band can incorporate instruments with differing investment
styles or objectives, but which also possess common risk characteristics. Saltus Believes that portfolios are best constructed by identifying and investing alongside specialist managers in each asset class. As mentioned, they look to access the widest possible set of opportunities across asset classes, investment styles and geographies. When finalising portfolio construction, they will also consider diversification within an asset class to ensure maximum risk-adjusted diversification is achieved.


4. Monitoring and feedback: Using bespoke analysis tools and systems, Saltus monitors portfolios in real-time allowing us to act swiftly to changing market conditions when required.


5. Reporting: All monitoring and feedback is reported on a weekly basis to their investment committee who implements any required changes.

Saltus

Adam is passionate about developing long standing relationships with his clients. He advises entrepreneurs, professionals, trustees, and retirees in various stages of life, but they all work closely with Adam to understand how best to preserve or grow their wealth. Managing his clients’ wealth typically involves much more than asset allocation. Adam spends time developing a deep understanding of what’s important to his clients before investing their funds to help them achieve it. He also works closely with clients’ lawyers and accountants to reach optimal outcomes and has regular discussions with younger family members to engage the next generation. Adam is a CFA Charterholder, is a Chartered Fellow of the CISI and has a degree in Economics.

Investment manager

Alex has experience partnering with high-net-worth individuals, business owners and families interested in intergenerational planning. She seeks first to understand her clients’ aspirations and goals to gain a deep understanding of what they hope to achieve. With specialist experience in cash flow modelling, Alex then designs tailored plans with her clients’ end goals in mind. Her knowledge of investments, pensions, estate planning and protection means she is well-versed in adapting plans over the course of her clients’ lives. Alex has over 15 years’ experience working in finance, working for top tier institutions JP Morgan and HSBC. She has achieved the gold standard Chartered status and has completed the Certificate in Financial Wellbeing. She firmly believes a well-structured financial plan has a positive correlation with one’s overall happiness.

Chartered financial planner

Alistair takes real pride in helping his clients to work out what they would ideally want for the rest of their lives and building close relationships to work together over the long term. Alistair believes that building a plan to show clients what their financial future might look like under various scenarios helps clients to take control of their financial decisions. This planning then helps to guide the way to the most appropriate investment solutions, so clients know their investments have been put together with their own financial goals and risk profile in mind. Alistair has extensive experience in helping clients improve their relationship with their wealth to maintain the lifestyle they want without having to worry unnecessarily about running out of money.

Alistair holds the designation of chartered financial planner, which is the highest recognition an adviser can achieve and shows a high commitment to ongoing study and professionalism. Having graduated from the University of Leeds with an undergraduate degree in Mathematics and Management Studies in 2001, Alistair has worked in financial services for over 20 years. He holds the advanced qualification for pension specialists and advises clients on pensions and investments as well as estate and tax planning.

Partner and Chartered Financial Planner

Gianpaolo (‘GP’ to most) works differently to much of the industry. Initial conversations deliberately try to avoid all matters financial. He is far more interested in the aspects of your life that make up who you, and your family are, and importantly, how you’d like your future to look. Ultimately, he works with you to help understand and plan how your specific aspirations can be better aligned with your finances. This allows your planning and decisions then made with greater clarity. Gianpaolo was a founding member of the Institute for Financial Wellbeing and was in the first cohort to attain the Certificate in Financial Wellbeing. He uses these insights when providing strategic, reality-focused advice. He is particularly attuned to the needs of successful executives and business owners – especially at life’s key transitions. Interactive cashflow modelling is used to help bring context to your decision-making process and bring to life your specific aspirations during your future life stages. GP has worked in financial services since 2001 and became a Chartered Financial Planner in 2008. He founded Higgins Fairbairn Advisory LLP, one of fewer than 300 Chartered Financial Planning firms, in 2010 before merging with Saltus in May 2022.

Jack works with individuals and families to provide pensions and investment advice in line with their needs and objectives. Jack has a focus on helping both employers and employees to navigate complex pension schemes. He also brings particular expertise in using appropriate tax vehicles to help those accumulating wealth, as well as structuring assets for individuals looking to draw a tax-efficient income in retirement. 

Jack joined Saltus in 2017 and has considerable experience having worked in the industry for almost 10 years. He is also one of the most qualified planners in the UK, having achieved chartered status in 2022.

Financial adviser

Lawrence provides a range of pension and investment advice. Whilst Lawrence supports individuals in numerous contexts, he primarily supports HNW individuals and senior executives with their retirement planning and complex tax arrangements. He is also highly experienced at providing specialist advice for Court of Protection cases and personal injury awards. 

To meet his clients’ objectives, Lawrence focuses on creating financial strategies that are flexible and sensitive to changes in circumstances. He works closely with clients to provide investment and planning advice to ensure their income and capital needs are met throughout their lifetime. A keen advocate of cashflow modelling, Lawrence believes it is essential to presenting a clear financial strategy.

Partner and financial adviser

Megan provides specialist advice to private clients on pensions and investments, as well as estate and tax planning. She works in partnership with her clients to ensure she fully understands their individual circumstances and aims to build long term relationships to ensure their goals are met both now and in the future.

Megan has particular expertise in supporting business owners, HNW individuals and senior executives with their retirement planning and complex tax arrangements. She also assists clients going through divorce, helping them reach financial settlements that are right for their needs and objectives.

After obtaining a Masters in Banking and Finance, Megan joined Saltus in 2015. Megan attained the highest level of qualification possible when she achieved chartered status and is a member of Resolution. She is also highly recognised in the industry having been selected as Citywealth’s Woman of the Year 2022.

Pete supports individuals in numerous contexts but his book of clients consists primarily of company directors and senior executives. He specialises in retirement planning and complex pension advice as well as tax-efficient structures and estate planning.

He is a first-class communicator and is highly experienced at cashflow modelling, which enables him to deliver insightful lifetime plans for clients. He strongly believes that helping clients envisage and stress test their financial plan is the key to helping them make informed financial decisions. Pete has worked in the industry for over 13 years and holds a Diploma in Regulated Financial Planning.

Phil has a no-nonsense approach, always helping clients to focus on the bigger picture whilst he takes care of the details. He has a strong focus on managing wealth across families due to his empathetic nature and is known for his ability to provide imaginative, yet pragmatic, solutions. Consequently, Phil is regularly called upon to help business owners structure their affairs and often assists with complex pension arrangements and divorce cases.

Phil joined Saltus Investment Managers as a Partner in 2014 and was one of the founding members of Saltus Financial Planning.

He has almost 30 years of industry experience and now sits on Saltus’s Management Committee as head of our Financial Planning team. Early in his career, he worked for two specialist pension companies and was then seconded to help establish distribution in the Channel Islands for an offshore investment firm. He later left the corporate world to establish and run his own firm for 13 years before joining Saltus. Philip holds the highest level of Financial Planning qualifications attainable as a Fellow of the CII, in addition to holding numerous Investment Management qualifications.

Jordan Gillies

Expertise

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How AI is helping Financial Planning and Investment Management

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Financial well-being

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Jordan Gillies

Expertise

Bio

Articles from author

How AI is helping Financial Planning and Investment Management

Start your journey to your Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Start your journey to your
Financial well-being