Advisors vs Algorithms: How much human touch does your portfolio really need?

AI is remarkably fast, immune to bias, and deeply analytical. It doesn’t just read data it understands patterns, anticipates risk, and learns continuously.

Investment research and portfolio construction are part art, part science, and both are being rapidly redefined. Building a strong portfolio has always required a combination of speed, intelligence, precision, and most importantly, data-driven decisions, not emotionally influenced guesses.

Now, with AI stepping into the heart of financial decision-making, it’s reshaping how we think about money. From powering self-driving cars to writing code and diagnosing diseases, AI is already solving problems once thought too complex for machines. And today, it’s doing the same in the world of investing.

So, does this mean the end of human advisory? Maybe not today. Maybe not tomorrow. But the definition of advisory is evolving, fast. The real risk lies not in being replaced by AI but in ignoring it.

AI is remarkably fast, immune to bias, and deeply analytical. It doesn’t just read data it understands patterns, anticipates risk, and learns continuously. It can process thousands of reports, simulate market stress scenarios, rebalance portfolios in real time, and align strategies with dynamic risk profiles.

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The AI impact

Let’s look at where AI is already making an impact, starting with stock selection. But wait, how do we pick stocks? First, before analysing a company, we need to go through qualitative and quantitative parameters.

Indicators, factors, and parameters come in different forms and types, and you can find various terms in the profit and loss statement, balance sheet, and cash flow statement. In addition, this might also entail reading con-call reports, quarterly reports, and sometimes credit rating reports as well. In an age where attention span is of a few seconds and an estimated 402 million TB of data is generated each day, reading yearly reports that are 300–700 pages long, and for the last several years, is a task in itself spanning weeks.

What takes a human weeks of reading, thinking, connecting, and cross-verifying, AI can complete in under a minute. Not just one report, but all the required documents.

Now imagine you're building a portfolio of 15 stocks. For a human, that means over 6,000 pages of deep reading and weeks of analysis.

But AI can scan through all those companies, compare ratios, past performances, promoter integrity, cash flow quality, product cycles, and even changes in tone during earnings calls at once. AI remembers how a company behaved during past down cycles. It connects macroeconomic trends with company-specific data.

So, it clearly shows that AI has a great edge in this regard. But stock picking is just a part of it, and in the portfolio construction process, the portfolio should be personalised. Building a personalised portfolio is the prime responsibility of an advisor. Now AI can even build that personalised portfolio.

Analysis is now being done by AI, and not just that, even the order placement is now being done by AI. So, analysis, order placement, rebalancing triggers — almost everything is being done by AI.

A human advisor can manage maybe 100 clients well. AI can manage a million portfolios at once, without forgetting a single update, bias, or missed opportunity. It doesn’t sleep, it doesn’t favour one investor over another, and it doesn’t make emotional mistakes.

AI keeps track of regulatory updates, budget announcements, policy shifts (like interest rate hikes or tax changes), and trade war escalations and dynamically suggests portfolio shifts based on these changes.

AI has transformed how portfolios are built faster, sharper, and more efficiently than ever before. From deep analysis to real-time rebalancing, it handles tasks that once took humans days or even weeks.

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The human edge

But investing is still deeply human at its core. Emotions, life events, legacy planning, and trust can’t be modelled fully by machines just yet. That’s why even as AI handles the research, portfolio construction, opportunity discovery, and rebalancing, many firms intentionally retain a human layer for client interaction and long-term planning.

Interestingly, clients still say: “I like that a human is still on the other side of the conversation even if your AI is amazing.”

And that preference may soon be challenged, too. With voice AI and conversational systems improving rapidly, we may reach a point where you won’t even know if you’re speaking to a person or an AI. In fact, the real challenge for the asset management industry won’t be human versus machine but transparency, trust, and ethical responsibility in how that line is managed.

Investing is not just about data; it is about decisions tied to your goals, emotions, and life changes. That’s where human insight still matters. The future of investing isn’t AI versus humans, it's AI with humans.

And most importantly, in this day and age where every software and its owner want to masquerade as AI, it is important to understand and verify when the work on such a system started, whether it has a real track record (not simulations or back-tests alone), and the credibility around such claims before making an investment decision.

The writer is Founder & CEO of Savart, SEBI-registered Investment Advisors & AI-powered Asset Management Firm.

Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.