Fund Selectors Voice Concerns Over AI’s Role in Manager Decisions

Fund Selectors Question AI’s Role in Fund Management

A recent survey conducted at Citywire Montreux reveals a cautious stance among fund selectors regarding artificial intelligence (AI). While most selectors are not yet incorporating AI into their own selection processes, they do expect fund managers to be using it.

According to the poll, 54% of selectors indicated they do not use AI at all when evaluating funds. This gap between expectations for managers and the selectors’ own practices highlights some uncertainty around AI’s practical application in fund management.

Selectors’ Concerns Over AI Usage

• Lack of transparency: Fund selectors worry about how AI-driven decisions are made and whether they can fully understand or trust these automated processes.
• Overreliance on technology: There is concern that managers might depend too heavily on AI, potentially overlooking human insights and market nuances.
• Ethical and compliance risks: The use of AI raises questions about adherence to regulations and ethical standards in investment decisions.

These concerns suggest fund selectors are weighing the benefits of AI against potential risks, aiming to strike a balance between innovation and due diligence.

Why Selectors Are Hesitant to Use AI

Selectors tend to prioritize qualitative assessments, personal experience, and traditional analysis methods. The uncertainty around AI’s reliability and the limited availability of tailored AI tools for selectors contribute to their slow adoption.

For professionals in management roles interested in integrating AI responsibly, gaining foundational AI skills can be valuable. Training programs that focus on practical AI applications in finance and management can help bridge this gap.

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Looking Ahead

As AI technologies mature, selectors may start incorporating these tools more actively in their workflows. Meanwhile, fund managers will likely continue to adopt AI to enhance research and portfolio management.

For managers and selectors alike, staying informed about AI’s capabilities and limitations will be key to making smarter, more transparent investment decisions.