Wealthfront, a digital wealth management company that utilizes technologies such as artificial intelligence (AI) to make decisions, will continue to invest more in AI to beat the competition. Traditional wealth management firms use human advisors, but Wealthfront believes that humans have implicit biases that do not allow them to always get the best return and charge significantly higher fees from portfolios.
Many people complain that this machine approach is dehumanizing. This announcement came right after Wealthfront’s competitor, Betterment, announced the addition of human advisors to their computer algorithms in hopes of adding a human element to investment.
These new types of wealth management services will give younger generations the ability to make investments at a younger age, thus a larger portfolio size at retirement. Whether machines will dominate the future, it will force management advisors to rethink their approach and pressure higher performance.
Reference: http://fortune.com/2017/02/02/wealthfront-robo-advisor-new-financial-service/