An ethics case study: AI in investment management

INVESTMENT professionals have increasingly embraced artificial intelligence (AI) to augment and improve the investment management process in many ways. However, as with any cutting-edge investment practice, managers must be diligent in ensuring new practices do not run afoul of the fundamental ethical principles of integrity, transparency, competency, diligence, and protecting client interests.

The following hypothetical case study and accompanying commentary illustrate a specific use case of AI in the investment management process and related client communications for the benefit of investors.

The case study

Simmons runs an investment management firm serving retail and high-net-worth investors. Eager to take advantage of AI technology and capabilities to enhance his advisory services, Simmons engages the services of a Big Data provider to gain access to raw information that can be used to identify attractive investments.