Bill Hortz's picture

[Artificial intelligence (AI) has emerged as a transformative force in wealth management by revolutionizing the way individuals and institutions navigate the complexities of financial markets. This has been further accelerated by the introduction of AI chat-based assistants like ChatGPT or Google Baird which demonstrates the power of a generative AI tool and how it can help individuals navigate complex questions and an overwhelming volume of data.

With their ability to process vast amounts of data, identify patterns, and make data-driven predictions, the rise of AI assistants is set to become a game-changer in the field of wealth management. By leveraging advanced algorithms and machine learning techniques, AI-powered solutions have the potential to enhance decision-making, optimize investment strategies, and deliver personalized financial advice to clients.

To understand how these types of tools are being built and enabling advisors to personalize their offerings at scale, we reached out to Institute Founding Innovator Member Dr. Vinay Nair, Founder & CEO of TIFIN – an AI-powered FinTech company that leverages data science, investment intelligence, and technology to help deliver engaging and personalized investor experiences. They just announced a partnership with Hamilton Lane – a leading, global investment manager providing private markets solutions -- and the joint launch of a new AI-powered investment assistant that will combine Hamilton Lane’s high-quality private markets data and intelligence with TIFIN’s AI technology and capabilities. Joining our interview with Vinay is Erik Hirsch, Vice Chairman of Hamilton Lane. We asked them both questions that dived into their partnership and goal of introducing a cutting-edge AI assistant into the world of private markets.]

 

Hortz: What was your motivation for building this new platform? What problems did you see that this joint venture is addressing?

Nair: Wealth management channels are under-invested in private markets compared to institutional investors. Despite this gap and the increasing access to such alternative investments, adoption has been stymied by the complexity of these products. Many financial advisors and their support staff lack the background or knowledge to navigate these investments. Our motivation was to apply brand-new technology to address this problem and build an AI assistant to simplify the intricacies of private market investing and empower advisors and their clients to adopt this asset class with more confidence.

Hirsch: Combining industry-leading data with innovative technology is allowing us to bring a product to market to address an important challenge: How to empower users who are generally newer to the asset class with accurate and insightful information via a user-friendly, intuitive interface.

Hortz: What are the intended benefits of the AI-powered investment assistant?

Nair: Our AI-powered private markets assistant aims to simplify the intricacies of private market investing. It will provide valuable insights and answers to the questions that advisors have. These questions can span across high-level educational questions to specific due diligence-related questions; from research questions around investment categories to performance questions around portfolios. As a result, the advisor now has a decision support system to navigate private markets, all in plain English and in a conversational framework.

Hortz: What makes this offering unique in the private markets?

Nair: This offering is the first of its kind. Not only is TIFIN bringing its expertise in building AI assistants (something we started a few years back) that are personalized, compliant, and actionable, but Hamilton Lane is also bringing its industry-leading data on private markets benchmarking, forecasting, and due diligence. This foundational product can further be customized by an enterprise to use its approved content and funds.

Hirsch: The complexity of this problem requires a true partnership and that is what TIFIN and Hamilton Lane have created. You need the best of two distinct worlds – technology plus industry data and insights. Technology today is limited by the quality of the data that fuels it. By merging our extensive, high-quality database with TIFIN’s technology, we believe we are unleashing something powerful.

Hortz: What specific data sources will the investment assistant utilize?

Hirsch: We are opening up Hamilton Lane’s data advantage to users of this product. At Hamilton Lane, we focus on deriving superior insights on the private markets through data that others just do not have. We have amassed a database that we believe is unparalleled in the industry, including information across 50,000 funds and 128,000 private companies - and we use this to form benchmarks, understand risk, and model what-if scenarios. 

Using data, we can evaluate an investor’s portfolio, compare investment opportunities, and surface optimized portfolio construction decisions. Through this tool, wealth investors now have access to this one-of-a-kind database and the models derived from it, unlocking a new level of connection and transparency to what was once just available to the institutional market.

Hortz: Will the AI-powered investment assistant be customizable for different users?

Nair: Yes, this offering can be customized for large wealth enterprises, relying on that enterprise’s compliance-approved knowledge base and approved universe of private market investments. It is intended to seamlessly integrate into their wealth management toolkit as a conversational interface. This customization ensures that the investment assistant aligns with the specific needs and requirements of different firms and their network advisors.

Hortz: How will the AI-powered investment assistant be available to users?

Nair: The investment assistant will be available as an API (Application Programming Interface) and is designed to be integrated within wealth platforms and digital marketplaces used by advisors and investors who are interested in private market allocations and optimization for their clients.

Hortz: How did you both work together to build and design your innovation for private markets? Any lessons you learned that you could share on how to develop and actualize a strategic partnership like yours?

Nair: Hamilton Lane and TIFIN started a strategic partnership in late 2021 and this new solution is our latest step in bringing together our complementary strengths. TIFIN has multi-year experience in building conversational AI capabilities, an example of which is Magnifi. Hamilton Lane has a multi-decade experience in research and proprietary data for investing in private markets. We worked collaboratively with our respective capabilities to consciously design an innovative solution for the industry.

Hirsch: Complex problems are often best solved through collaboration. Our partnership with TIFIN embodies that philosophy. We bring a long history of investing in and partnering with leading private market technology companies to drive innovation, transformation, and success.

Hortz: What advice or recommendations can you share with advisors on how they can employ an AI chat-based assistant in their practice?

Nair: As advisors increase allocations to private markets, they can simply interact with the AI assistant and ask questions about the asset class, specific styles, or even funds. Alternatively, they can use it for research or write their own fund summary docs for clients. They can direct client questions to the AI assistant and have real-time responses. All in all, much like ChatGPT, advisors can simply use this capability to build more knowledge and confidence with this asset class while also helping their clients with better outcomes and experiences.

 

The Institute for Innovation Development is an educational and business development catalyst for growth-oriented financial advisors and financial services firms determined to lead their businesses in an operating environment of accelerating business and cultural change. We operate as a business innovation platform and educational resource with FinTech and financial services firm members to openly share their unique perspectives and activities. The goal is to build awareness and stimulate open thought leadership discussions on new or evolving industry approaches and thinking to facilitate next-generation growth, differentiation, and unique community engagement strategies. The institute was launched with the support and foresight of our founding sponsors — Ultimus Fund Solutions, NASDAQ, FLX Networks, TIFIN, Advisorpedia, Pershing, Fidelity, Voya Financial, and Charter Financial Publishing (publisher of Financial Advisor and Private Wealth magazines).

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