Guilherme Cardoso, Wealth Management Unit Fund Selection at Millennium bcp, draws from experiences seen in the US market when formulating views. There, the robo-adviser has not necessarily become popular versus traditional advisory processes.
And there is a big question over reliance on big data: “Big data is historical data, crisis data is new and there is no record of it; it does not shield you from the new crisis.”
And private bank clients want to speak to a person ahead of online banking attempting to implement robo-advice, he adds.
Meanwhile, Cardoso does not see an automatic advantage for younger financial services professionals in terms of using technology versus older peers, who may bring other skills to the job of putting a shortlist together.
Paul-Antoine Hocké, asset allocation analyst at EOS Allocations, also queries assumptions around technology.
“Data is at the core of financial investment, from private equity to high frequency trading and it is being consulted by institutional and retail clients.”
“The tools exploiting data to extract the meaning of it appear crucial to financial actors. Even in France where we have a tendency to be sceptical regarding innovation, fintechs have raised the curiosity of institutional and retail investors.
“But, what is being presented as innovative today exists since a while in the asset management industry through proprietary asset allocation tools. We should rather speak of democratisation than innovation here.”
Mikael Haglund, head of Manager Research, Large Corporates & Financial Institutions at SEB in Stockholm said that greater use of IT may make some parts of the selection process more efficient; for example, in the area of data processing.
Thus areas such as RFPs can become more efficient through increased automation, Haglund suggests.
But, in regards to site visits, and meeting CEO/CIO level people and others who work with the actual portfolio managers of funds, it remains a very important part of the overall SEB
selection process to perform qualitative analysis in situ.
What is certainly not on the radar of SEB’s fund analyst team is use of artificial intelligence, which is some years away from being integrated into the selection process, Haglund says.