How Artificial Intelligence Speeds Data Gathering and Portfolio Analysis for Financial Advisory Firms

Published on
September 24, 2024
Contributors
Cameron Howe
CEO
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Financial advisors wear many hats, including the critically important but often laborious job of gathering data and doing analysis. This process can feel like a constant battle against time and errors. Sifting through countless statements and documents is a slow, tedious process.

The good news is artificial intelligence (AI) is fundamentally changing this process (and many others), automating these tasks and empowering advisors to focus on what matters most: their clients.

This article explores how AI is transforming how advisors gather and analyze data, leading to a new era of efficient and precise portfolio management.

1. Data Challenges of Holistic Portfolio Analysis with New and Existing Clients

Financial advisors face several roadblocks when it comes to comprehensive portfolio analysis:

Fragmented Data Across Multiple Accounts

Imagine trying to piece together a complex puzzle with parts scattered across different places. This is the challenge when collecting data from various financial accounts and institutions. The manual process of gathering and verifying account statements can slow down workflow and increase the chances of errors. Key details needed include:

  • Share/security/ticker names
  • Quantities
  • Purchase prices
  • Current values
  • Transaction dates

Uncovering Hidden Assets in Held-Away Accounts

Another significant challenge is identifying assets that aren’t directly managed. These hidden assets are critical for a comprehensive financial view but are often missed due to manual data collection. Without these pieces, portfolio assessments may be incomplete or inaccurate.

Aggregating Holdings for Comprehensive Analysis

Once data is collected, it needs to be compiled into a single, unified format for effective analysis. This step is not only time-consuming but also susceptible to errors. Common mistakes include:

  • Incorrect ticker symbols (a single letter can change the entire security)
  • Wrong quantities
  • Misformatted dates and currency values

Additional Considerations

Inconsistent data and errors can have a significant impact on portfolio management. Timely data updates are essential for effective monitoring and management, but manual updates often lag, leading to outdated information and suboptimal decisions.

2. AI-Powered Data Gathering Solutions

AI technology addresses these challenges by automating many aspects of data gathering:

OCR Technology Enhanced by AI for Intelligent Document Processing (IDP)

Think of Optical Character Recognition (OCR) technology as a super-efficient assistant, especially when integrated with AI to create Intelligent Document Processing (IDP). This combination automates the extraction of data from account statements and documents, speeding up the data entry process and reducing errors. AI improves OCR by enabling it to handle more complex documents and learn from corrections, ensuring continuous improvement. OCR technology precisely captures crucial details, including:

  • Share/security/ticker names
  • Quantities
  • Transaction dates

IDP leverages AI to classify documents, extract relevant information, and understand context, transforming document processing into a more efficient and accurate operation.

Optical Character Recognition (OCR) and AI technology can automatically scan and extract data from brokerage account statements

Direct Data Feeds

With custodial integrations, seamless portfolio synchronization is achieved through direct data feeds. This means:

  • Real-time updates on client holdings
  • Enhanced visibility into held-away assets and external accounts

A comprehensive view of clients' financial situations is maintained without the need for manual data entry. Accurate and timely data ensure reliable portfolio assessments and recommendations.

AI-Driven Risk Assessments

AI doesn’t just gather data; it makes sense of it. Automated risk profiling and data analysis swiftly assess client risk tolerance and financial goals. These AI-driven assessments improve the ability to offer personalized investment strategies that align with clients' risk profiles and objectives.

3. Benefits of Using Investipal for Data Gathering and Portfolio Analysis

Investipal's AI-powered solutions offer numerous advantages that streamline data gathering and portfolio analysis:

Faster Time to Analysis

Investipal’s AI-driven technology is designed to extract and compile data both quickly and accurately, significantly reducing the time traditionally spent on data preparation. This improvement enables advisors to:

  • Spend more time on meaningful client interactions
  • Deliver timely and relevant advice

Enhanced Accuracy and Reduced Errors

By automating data extraction and aggregation, the risk of human error is minimized. Investipal ensures that all gathered data is both accurate and consistent, which is crucial for reliable portfolio analysis and decision-making. This precision helps build client trust by providing dependable insights.

However, while Investipal can deliver data with over 90% accuracy, human review is essential to ensure contextual accuracy.

Comprehensive Financial Overviews

Investipal's advanced features, such as OCR technology and direct data feeds, provide advisors with a full picture of their clients' financial situations. This comprehensive view includes:

  • Identifying hidden assets
  • Aggregating all holdings

Such a holistic perspective is vital for effective portfolio analysis and strategic planning.

Improved Client Satisfaction

By leveraging AI for data gathering and portfolio analysis, advisors can provide clients with more personalized and timely advice. Investipal’s tools enhance client satisfaction by ensuring that recommendations are accurate and aligned with financial goals. This efficiency fosters greater trust and satisfaction, leading to stronger client relationships and higher retention rates.

Streamlined Workflow

Investipal’s platform integrates various data sources and automates manual processes, resulting in a more streamlined workflow for advisors. This integration:

  • Saves time
  • Allows advisors to manage clients' portfolios more effectively
  • Ultimately boosts productivity and performance

Conclusion

Integrating AI into your data gathering and portfolio analysis processes offers substantial benefits for financial advisory firms. By adopting AI-powered solutions like those provided by Investipal, you can improve efficiency, accuracy, and client satisfaction. Book a demo to explore Investipal’s AI tools to enhance your advisory services and stay competitive in the evolving financial landscape.

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