There’s one thing that unnerves every investor around the world when accumulating their portfolio: bias. This is because, when making decisions based on wealth management advice, there is still a sizable gap between the client and the advisor.

While this might not be a concern for every aspect of the wealth management industry – such as retirement planning, minimising bills, or increasing savings – it can be a worry when it comes to allocating assets and growing an investment portfolio.

What Is Wealth Management Bias?

The definition of bias is when a conscious or subconscious prejudice is held toward something. It’s a human weakness that can affect everyone, from the investor to the advisor, and there have been many cases of it in the financial industry over the years.

When it comes to wealth management, this kind of bias can be witnessed in various forms. It could be representative bias, which is when a snap judgement is made due to similarities and patterns recognised in the data.

It could be familiarity bias, which is when investments are made within a comfort zone. Or it could be confirmation bias, which is when a company favours their own information and practices due to previous success.

For any investor and wealth management company, these are the kinds of biases that they will try to avoid when accumulating solutions and making decisions – particularly risky decisions could go one way or the other.

Is It Possible To Overcome Bias?

Thankfully, new technology is knocking on the door to resolve the problem for investors, as well as the wealth management market. In an article discussing the -$90 trillion market for grabs: How FINQ leads in AI-driven “Wealth Management” for all, FINQ in question pinpoints the role of AI in wealth management operations, to the point where it can eradicate the possibility of bias by offering purely scientific insights based on big data.

FINQ has been making waves in the industry by utilisng a system which cuts the gap between the client and the advisor. They’ve done this by replacing traditional wealth management practices with modern, data-driven solutions attained by AI integration. This allows any investor to build a portfolio through reliable decisions gleaned from big data, algorithms, and internet-wide insights.

A Change Of The Guard?

Over the coming decade, it’s likely that we will see a changing of the guard when it comes to wealth management services. The companies that will succeed are the ones who recognise the need for purely data-driven advice compared to advice that has the potential for bias.  This means utilising AI tools and putting them into practice.

Already, it’s been revealed that 1 in 3 investors are comfortable with building portfolios based on AI-driven solutions, so the market is there for the taking. Whether it is taken, however, is up to the companies themselves and how much they prioritise portfolios without bias. One thing is for sure, it’s an exciting time for investors around the world, as the potential of AI becomes more widely known and integrated into traditional methods to manage finances.