Since the rise of ChatGPT in late 2022, users have bombarded the AI platform with diverse requests. From composing poems to tackling philosophical inquiries, a growing trend involves seeking investment advice.
University of Florida researchers recently fed ChatGPT headlines about major U.S. public companies (50,000 articles). They analyzed if positive or negative coverage impacted stock price the following day, and even explored long-term performance predictions.
While the study aimed to assess ChatGPT’s viability for investment analysis, fee-based investment advice apps are already emerging. Magnifi, an online investment platform (founded in 2018), recently incorporated ChatGPT to power a digital “investment mentor.”
A Co-Pilot for Independent Investors
This chatbot responds to investment-related questions, informing users about company earnings, interest rate fluctuations, and relevant news affecting their portfolios. It also highlights promising new companies and ETFs.
“It acts as a co-pilot for the self-directed investor,” founder Vinay Nair explained to CNBC. “Brokerages today provide open access to trading and markets, but lack intelligence and personalization. Magnifi strives to democratize intelligence in a customized way.”
Nair originally established Magnifi to help users discover new stocks and ETFs, along with short-term performance data. The platform also facilitates direct stock trading.
While a free seven-day trial exists, basic access starts at $13.99 monthly or $131.99 annually. Nair has acknowledged using ChatGPT initially to deliver data in a familiar, human-like voice. However, some critics view this as “cheating” rather than automation.
“Our model prioritizes the customer, offering no incentive for excessive trading,” Nair clarified to CNBC.
The Rise of AI-Driven Investment Advice
For years, various forms of AI generated content with a robotic feel. ChatGPT’s success lies in its ability to closely mimic human communication. A tech director uses it for tasks ranging from coding to composing emails.
The debate regarding overreliance on AI persists (with 42% of Americans fearing job displacement by AI). However, the technology is seamlessly integrating into many industries, functioning best when collaborative with human workers.
Finance is no exception. OpenAI, the company behind ChatGPT, predicts that 80% of the U.S. workforce will utilize AI for at least 10% of their tasks within a decade, with financial advisors and investment managers potentially using it for up to half their daily activities.
