Democratising investment – will it spell the end of traders?

Plant growing in coins inside a jar concept of investmentFigures from popular culture such as American author, entrepreneur, philanthropist and life coach, Anthony Robbins – who just released a book on financial investing called Unshakeable – are popularising the idea that anyone can invest. Many people and businesses used to be put off by the idea of the complications of the investment market but, with companies like Wealthify and HedgeSPA claiming that they can automate the process, the arena becomes more accessible all the time.

HedgeSPAs mission statement claims that they are ‘democratizing sophisticated investment analytics for faster and more accessible advanced investment analytics critical to buy-side firms’. They have attracted investment from the FinTech Innovation lab and SMU Institute of Innovation & Entrepreneurship in order to do so.

Another type of fintech is Robinhood. They provide a zero-commission trading app to consumers and, in the last 3 funding rounds over 3 years, they managed to raise £173 million in order to do so.

These companies are the very tip of the iceberg. Fintechs all over the map are jumping in to try and create the system that unlocks the market for more and more people.

Algomi investment and the human factor

Despite these developments, there are companies that champion the human factor when it comes to investment. Algomi chairman said:

“Coming from an e-trading background allows me to see the limits of electronic execution and the bond markets are too broad and complex for this. We digitise the information to allow investment banks’ sales and traders’ access to the broadest range of opportunities and offer products that their clients might not even realise they want. But there remains a need for human intervention in the execution.” – Algomi investment software innovator, Stu Taylor

Even the fintechs mentioned above still rely on human intervention. There are billions of connections that the well-programmed investment software can make but there’s an x-factor that involves pulling together news, information passed between colleagues, and other unknown sources in a way that cannot yet be programmed. AI may crack this in the future. After all, programs have already developed that allow it to dream. However, that time has not yet come and so it’s safe to say that traders will still be in high demand – for now.