There’s no shortage of industries grappling with the implications of increasingly capable artificial intelligence and its impact on their workplace, and money management is proving no exception. But financial advisors in Los Angeles are confident the programs will revolutionize their jobs, not replace them.
That may mean getting more familiar with Roger, an AI software launched on June 15 by Beverly Hills-based fintech company Tiblio Inc. The company says its Tiblio AI is “the first and only AI-powered options income assistant” on the market capable of automating investors options strategies.
Once the investor determines their options strategy, the company says its software does the time-consuming legwork to see it through. The options strategy runs throughout the trading day to check for profit and send orders to open new positions, “and unlike traditional robo-advisors, investors remain in complete control of their finances with the ability to adjust a trade, make corrections, fix orders and generally trade alongside Roger in their account,” the company said in a statement.
Chief Executive Kevin Hamilton said the Tiblio AI is already advanced enough to provide the average investor with professional-level returns. Instead of having to worry about the minutiae of each individual trade, Hamilton said, Tiblio AI puts retail investors in the position of portfolio manager.
“Tiblio AI’s the first that will actually submit orders for you and do so correctly, and they make sure they get executed,” said Hamilton.
He said Roger’s best selling point is that it protects investment strategies from emotional responses and human error.
“It’s really where the retail investors tend to trip that I’m excited about, in the really hard things. In the hard times of investing, you need something that keeps you on track, on the plan, and that’s where retail investors struggle,” said Hamilton. “It’s like that Mike Tyson quote, ‘Everybody has a plan until they get punched in the mouth.’”
Hamilton noted the company’s software is determinative AI, relying on real-time datasets to capture what’s essentially a screenshot of the financial market. He contrasted this with generative AI, which relies on information provided to it by its developers to provide a “best guess” response and aren’t capable of responding to factors in real time.
An example of determinative AI would be IBM’s chess-playing Deep Blue system, while generative AI powers the popular ChatGPT system created by the Santa Clara-based research lab OpenAI.
“The really difficult thing to navigate in the financial modeling system is the execution of deals. Hedge funds can already do this, but they have high-powered computers and sophisticated models that give them the confidence to basically rely on a machine to trade for them,” said Hamilton.
Impact on finance
Greater implementation of generative AI like ChatGPT in the stock market has been a hot topic of discussion in financial circles in recent months. Ryan Parker, president and soon-to-be chief executive of West-L.A. based money management firm EP Wealth Advisors, says the technology has significant potential. But even if it becomes more advanced, he suspects it won’t be upending the money management industry so long as it’s still just making informed guesses.
“As fiduciaries, we’re going to have to be really confident that when you ask ChatGPT or whatever AI for information that turns into advice that will impact a person’s entire financial life, that it’s the truth and in the proper context. And how do you ensure that without the involvement of a human being?” said Parker.
Parker said his firm’s been meeting with leaders in the AI space and embracing opportunities to learn, but it’s not rushing to be one of the first past the post to work the technology into their investment strategy.
“We’re leaning into understanding, but our clients’ worth more than being the beta test for some company’s tool,” said Parker. “Still, it’s the height of arrogance to say that these kinds of companies can never change the landscape.”
Reza Zamani, chief executive of the financial advisory firm Steel Peak Wealth in Woodland Hills, took a similar line, arguing their evolution in the stock market will likely be akin to the advent of internet search engines. Reshaping the landscape, but not making it unrecognizable.
“When Google first launched as a search engine, on day one it might have been very hard for companies to embrace. But they quickly came to understand the value to their client, and they learned how to work with it,” Zamani said. “I think we’re more in the embracing camp – the challenge is that it’s in the early stages. So the short answer is, we’re embracing it; the longer answer is, how do we embrace it?”
Khrys Balthazar, portfolio management director of Sherman Oaks-based California Capital Management, said the firm would certainly consider opportunities to implement technologies like ChatGPT in their work if the benefit to clients became apparent.
“We are always looking to enhance our tools to better serve our clients, so we are exploring incorporating AI in parts of our systems where it makes sense. AI has and will continue to make an impact, and it will be difficult to ignore companies that prioritize investment in this area,” Balthazar said.
As for Hamilton – and Roger – their team will continue developing the Tiblio AI’s offerings and capabilities, with Hamilton noting a particular interest in finding ways to join the power of generative AI and deterministic AI in the market.
“I see the Holy Grail being a program that could help people actually pick stocks; it would be interesting to see what the money management firms are going to do with it,” said Hamilton. “Picks with real conviction (based on a person’s interests), not a stock pick that’s a gamble.”
