Launched just two years ago, PortfolioPilot has made substantial strides as an automated financial advisor, quickly accumulating $20 billion in assets. This service is the brainchild of Global Predictions, a startup based in San Francisco, which has successfully onboarded over 22,000 users. To support its growth trajectory, the company has recently secured $2 million in funding from various investors, including Morado Ventures.
According to Alexander Harmsen, the founder of Global Predictions, there is a growing discontent among individuals towards generic portfolios, leading to a demand for customized insights and recommendations. “When we think of next-generation advice, it should genuinely be personalized, allowing you to dictate your level of involvement,” Harmsen remarked. The startup leverages generative AI models, machine learning technologies, and conventional financial models to predict and analyze user portfolios.
Its approach emphasizes three core elements: aligning investment risk with user tolerance, achieving risk-adjusted returns, and enhancing resilience to sharp market downturns. Users are offered a complimentary report card-style evaluation of their portfolio, whereas for a subscription fee of $29 per month, a “Gold” account unlocks tailored investment recommendations and access to an AI assistant. Global Predictions primarily caters to individuals with assets ranging from $100,000 to $5 million, with the average user’s net worth being around $450,000.
At present, the startup provides its paying clients with comprehensive guidance to customize their portfolios, and it may explore the option of managing user funds in the future. Harmsen originally developed the first iteration of PortfolioPilot to oversee his own financial assets after divesting his initial company. Frustrated with the conventional practices of financial advisors, he sought hedge fund-level instruments for effective risk and portfolio management.
Boost in PortfolioPilot’s growth and oversight
The company’s rapid ascendancy has drawn the attention of regulators, with the Securities and Exchange Commission accusing Global Predictions of presenting misleading information on its website in 2023. Consequently, the company incurred a $175,000 penalty and revised its tagline.
Harmsen anticipates that many traditional financial service providers will struggle to keep pace with the shift towards fully automated advisory services. “I see this as a monumental leap for the conventional finance sector; it’s not just incremental change, it’s a stark dichotomy,” he mentioned. “While I’m uncertain about the developments over the next decade, I predict there will be significant upheaval for traditional human financial advisors.”
The worldwide market for artificial intelligence (AI) in asset management is on track to reach $14.1 billion by 2030, with a compound annual growth rate (CAGR) of 22.1%.
The segment dedicated to Machine Learning Technology is forecasted to hit $7.9 billion by 2030, growing at an 18.6% CAGR, while the Natural Language Processing (NLP) segment is expected to expand at a remarkable 28.7% CAGR. Notably, the U.S. market, currently estimated at $935.5 million in 2023, alongside China—predicted to increase at a 21.2% CAGR to achieve $2.2 billion by 2030—is exhibiting promising growth trends, as are other regions including Japan, Canada, and Germany. The increasing integration of AI in asset management necessitates careful consideration of regulatory and ethical issues to ensure transparency and equitable practices in AI-assisted decision-making.
To thrive in the future’s digital and data-centric marketplace, asset managers will need to develop expertise in data science and AI. Recently, PortfolioPilot completed a $2 million seed funding round, with support from Morado Ventures, NEA Angel Fund, Unpopular Ventures, and notable angel investors from Silicon Valley. The capital will be utilized to enhance its AI capabilities and deliver personalized investment insights.
In August 2023, PortfolioPilot gained approval from the SEC to operate as a Registered Investment Advisor, enabling it to offer fully automated financial advisory services. The platform is capable of managing a diverse range of financial assets and connects to over 12,000 crypto wallets, banks, and brokerages while maintaining high security with 256-bit encryption.
