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How AI-Powered Investing Is Changing Wall Street For Millennials

Millennials make up the biggest generation in existence. What they do has the power to influence what groups before and after them do. And they do things differently. In fact, research suggests that they’re the first generation to “influence up.” 

Representing the large majority of the labor force and touted as the most powerful consumers, millennials have been at the helm of most modern-day revolutions. From reforming corporate culture and shaping today’s workplaces to recasting the American family and pioneering the technology that drives our everyday lives. Technology that instantly delivers on our demands. (Read: Pick-up-drop-off wash-and-fold at the tap of a button—because the laundromats still require coins. And who keeps coins unless they’re digital and called crypto?)

A wealth of research suggests that, simply put, millennials are self-starters. Most aspire to be entrepreneurs or self-employed, and they tend to open more businesses than generations before them.

Moreover, millennials have stemmed the tide of a rapidly changing world despite all odds—like burgeoning student loan debt and the climbing cost of living. All in an age of divisive political pandemonium, economic strife and a spate of pandemic health crises, coupled, to little surprise, with rising rates of depression and crippling anxiety of the future.

That millennials are now hankering for more active roles in their own futures, including their financial futures, is nothing new. And, not unlike Thai takeout via Uber Eats or that Tacosaurus t-rex taco stand on Amazon Prime they never knew they needed, they want a say in their financial freedom. And they want it right now.

So despite everything happening around them, it shouldn’t be a surprise that they’re seeking out more heavily involved investing experiences—experiences that are their own and that hand them the reins. Just consider their predominant involvement in the whole GameStop saga, the dawn of all that crypto commotion, and the advent and emergence of meme stocks.

Millennials are readily aware that the risk of not investing is just as real as the risks that accompany investing. After all, this generation coined the term “fear of missing out” (FOMO). And they certainly grapple with fears of missing out on the $3.3 million in potential retirement gains more so than their fears of the swinging stock market and all the anxiety-inducing, alien jargon that litters it.

Fortunately for them, artificial intelligence-powered investing places the odds in their favor and relieves them of navigating numbing data on their own. AI empowers fintech consumers to make more educated and informed decisions that are rooted in logic that’s derived from deep learning algorithms. Algorithms that crunch the numbers for them. Algorithms that consider their personal investing goals and risk tolerances.

Ultimately, AI democratizes the world of investing for those who have access to neither the time nor the tools to invest like professional Wall Street analysts.

And because traditional is sometimes synonymous with antiquated in millennial minds, AI offers a much-needed respite from the very much behind-the-times mutual fund industry and its costly management fees. In fact, nearly 75% of the $21 trillion mutual fund industry is controlled by just three companies, while five firms control 90% of the $5 trillion ETF industry. The first-known robo-advisor was Mint’s semi-automated financial manager that launched in 2006, and little has evolved since.

The $25+ trillion fund-management industry is stuck in the past. But artificial intelligence is changing the game by unlocking top-performing strategies once reserved for elite hedge funds. Its use in modern robo-advisors means automation can conquer portfolio management for far less dollars. So the retail investor is afforded features like portfolio diversification and automatic rebalancing to protect gains amid inevitable market volatility.

​​Existing players developing AI-powered digital strategies include Charles Schwab, JPMorgan Chase, Vanguard and Morgan Stanley, as well as, more recently, Robinhood, Wealthfront, and Forbes-backed Q.ai.

While these AI strategies do help investors identify wiser market moves, they do not do what millennials, in particular, loathe the most: push them out of the pilot seat. AI offers full transparency. Like an electric car, it’s wired to operate with efficiency and accuracy, getting you from Point A to Point B, but you still sit at the wheel with total control and the choice to either sit back or steer.

AI-powered investing boasts more freedom and flexibility for everyday investors, regardless of their experience, liquid capital or lack thereof. Only time will tell how AI continues to adapt and develop within the fintech space, but we’re certain that it’s headed somewhere smarter, safer and… where money can make more money for millennials and everyone else.

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