Ruby Layram
16th Apr 2024
Reading Time: 9 minutes
It seems like AI has taken over the world in the last few months. The technology is now being used for pretty much everything from generating images to writing emails. But, did you know that AI can also be used to help you invest?
The rise of artificial intelligence has caused many financial institutions to harness the technology and create powerful AI-investing tools for users. These tools can be used to analyze the market, spot potential opportunities, and even automate the investing process.
A recent report showed that 31% of Gen-Z and 20% of Millenials are using AI apps to invest. This number is only expected to rise and more and more platforms start offering robo-advisor services to their customers.
At MoneyMagpie, we love making investing easier for our readers. So, we thought we would conduct a bit of research and take a look at some of the top AI investing apps to see if they are really worth the hype.
Before we continue, we want to stress the importance of conducting your own research before making any investment decisions. These AI apps are designed to assist your investing and not to take over it entirely!
What are AI investment apps?
The risks of using a robo-advisor
Why might someone use an AI investment app?
5 AI apps for investing in 2024
Our top tips for staying safe when using an artificial intelligence investing app
What are AI investment apps?
So, what exactly do we mean by ‘AI investing apps?’
Using AI to invest doesn’t involve any kind of robot or other-worldly being. Instead, AI investing apps, or ’robo-advisors’, are online platforms that use machine learning and algorithmic technology to analyze trends, spot price patterns, and make investment suggestions on behalf of users.
These apps look like regular trading apps. In fact, most of the time these platforms are extensions of traditional online brokers. For example, Vanguard has recently introduced its ‘robo-advisor’ which uses AI to provide market insight to investors.
Some AI stock apps use artificial intelligence to manage your investment portfolio. Others use AI to simply provide investment suggestions based on algorithmic analysis.
If you have ever used a managed investment service, such as a stocks and shares ISA, AI investment apps won’t seem too alien to you.
The main difference is that decisions are made by algorithms rather than people!
Most apps will ask you to set your parameters (a fancy word for settings) to make sure that the AI makes suggestions that are in line with your goals and risk appetite.
Once you have set up the app, the algorithm will actively watch the market, conduct analysis, and buy or sell assets when it spots a good opportunity. This could prevent you from missing a good buy or sell price and help you to make sense of the market during busy periods.
The risks of using a robo-advisor
So, if AI investing apps are so great, why isn’t everyone using them?
This mainly comes down to the level of risk that is involved with using AI to make investment decisions.
Using an AI investment app isn’t straight sailing. There are a number of risks that you should be aware of before you consider using one in 2024.
Venturing out of your depth
One of the biggest risks of using a robo-advisor is the risk of overestimating your abilities and following a strategy that is too advanced for your experience.
AI investment apps do not know your specific skillset, knowledge, or boundaries when it comes to investing. Therefore, some apps may make suggestions that are a little out of your depth!
This might look like telling you to use leverage or to invest in derivatives rather than traditional stocks and shares.
Lack of regulation
Although some robo-advisors are offered by regulated platforms, there are also quite a few online AI investing platforms that are not regulated in the UK.
Using an unregulated app to invest is risky because you may not be eligible for any financial protection. Always double check that a platform is regulated before signing up.
Uninformed decision making
Another risk that comes with using AI to invest is crossing the line between informed decision-making and gambling.
Robo-advisors make it too easy for investors to forget the research part of investing and rely solely on the suggestions that are made by the AI. This is an incredibly risky way to invest!
AI investment apps should be used to guide your investment strategy, not to take over it completely!
It is always important to do your own research before making any investment decisions.
Learn how to navigate the market like a pro:
Why might someone use an AI investment app?
Although robo-advisors come with risk, there is no denying the fact that they have seen a surge in popularity over the last few years. According the Statista, the number of investors who use AI robo-advisors could reach 34 million by 2027.
That’s half the entire population of the UK!
So, what are the benefits of using an AI investing app?
Reduce research and analysis time
One of the main reasons that you might consider using an AI app to invest is to reduce the time that it takes to conduct research and analysis.
Robo-advisors cut down this time by using advanced algorithms to quickly scan the market, collect data and present relevant findings in a digestible way. It’s like having your own research assistant!
Watch the market around the clock
Imagine being able to stay on top of every single price movement, news headline and trend. Well, AI investing apps make it possible to do just that.
The algorithms work around the clock to analyze the financial markets and make suggestions based on the information that they gather.
Using an AI app to invest is a great way to make sure that your decisions are in line with current market conditions.
Take the emotion out of investing
Human beings have a tendency of letting our emotions guide decision making. Whether this means selling a stock as soon as you see the price start to fall, only to miss future returns. Or, buying into an opportunity too late because of FOMO and seeing a loss.
Using a robo-advisor is a good way to remove the impact of emotions on investing. These tools base their decisions off of objective data and analysis, unlike us emotional humans!
See also: 4 tips for dealing with the dangers of FOMO
5 AI apps for investing in 2024
There are many different AI apps and robo-advisors out there to suit all sorts of investing.
Unfortunately, we didn’t have time to review all of them! However, we did spend time looking at 5 top options that you could consider in 2024.
The following AI investing apps are available to investors in the UK.
1. InvestEngine
InvestEngine is a fairly new platform that was founded in 2019 by the co-founder of Gumtree. The platform has grown to be one of the most popular robo-advisors and has received numerous positive reviews online.
The platform can be used to invest in ETFs on the stock market, commodities market or bonds market. Users can choose to use the platform’s AI investing tools or build their own portfolio from as little as $1.
What we like:
- InvestEngine supports fractional investing from $1.
- There are over 620 ETFs available to invest in.
- InvestEngine is regulated by the Financial Conduct Authority
- The website is easy to use and offers lots of educational resources.
2. Plum
Plum is a highly-rated investing app that comes with a handy AI feature. The app uses automation to help users manage and save their money in a way that aligns with their long term goals.
The app was rated as the Best personal Finance App 2023 by Smart Money People and is used by over 2 million people world wide.
Plum is a little different from other investing apps. This app uses AI to watch your spending an automatically save money for you, based on your goals.
What we like:
- Plum is available as a mobile app which means that you can invest and save on the go.
- The app offers over 1800 stocks to invest in.
- Users can set goals and save money here and there on auto-pilot
3. Wealthify
Wealthify is a kind of AI investment app that makes it possible for you to leave your portfolio in the hands of experts.
You can use the platform on your smart phone or PC to invest, save and even contribute to your pension.
Unlike some AI investing apps, Wealthily doesn’t provide suggestions or ‘signals’. Instead, the AI element of this platform allows a team of experts to handle your portfolio on your behalf. You asset your goals and let the platform do the rest.
What we like:
- Wealthify offers a range of managed portfolios and ISAs for long term investing.
- The platform is available on desktop and mobile.
- The platforms create a personalized investment plan on your behalf to help you reach your goals.
- Portfolios can be managed around the clock for 365 days a year.
4. Nutmeg
Nutmeg is an investing app that is owned by J.P.Morgan. The app is very popular for investing in ISAs. Like Wealithy, Nutmeg uses AI to invest on behalf of users through managed portfolios.
You can choose your risk level and long term goals. Then, the app will work in the background to manage your portfolio and invest on your behalf.
What we like:
- Nutmeg offers a good range of ISAs including Lifetime ISAs, Stocks and Shares ISAs, Cash ISAs, and Junior ISAs.
- Nutmeg is available on PC and mobile.
- Nutmeg offers ethical investing options for eco-conscious investors.
5.IG Smart Portfolios
Lastly we have IG Smart Portfolios – a service offered by IG that manages your portfolio in line with your financial needs.
IG has a six year track record for providing returns to investors and is one of the most popular AI investing apps out there.
Like Wealthify and Nutmeg, this platform offers managed portfolios that takeaway the need for you to make stay on top of the market and watch your investments.
What we like:
- The platforms offers access 13,000+ markets
- IG Smart Portfolios have consistently performed better than the benchmark for 6 years
- The platform is vert user-friendly and offers a lot of helpful resources
Our top tips for staying safe when using an artificial intelligence investing app
With the rise of AI-powered investing apps, you can now access sophisticated algorithms and data-driven insights in the palm of your hand.
While these apps offer great potential, it’s important to prioritize safety when using them. Here are our top tips for staying safe when using an AI investing app.
1. Shop around
Make sure to do thorough research before choosing an AI investing app.
Look for reputable companies with a track record of success and positive user reviews. Consider factors such as security measures, regulatory compliance, and transparency in their investment strategies. Don’t be afraid to ask questions or seek recommendations from trusted sources.
2. Do your own research
Although using an AI app can be a good way to reduce the amount of research that you need to do, you shouldn’t forget about it completely!
It is important to keep yourself updated with the stock market and to regularly assess whether or not your portfolio is in line with your goals.
3. Understand your risk appetite
Most AI investing apps will ask you to determine what level of ‘risk’ you would like to use.
High risk options are usually associated with higher rewards but an equally high chance of losses. On the other hand, low risk portfolios don’t offer the same impressive returns but often come with a lower chance of losing your money!
Take time to think about whether or not you can afford to lose the money that you invest before choosing a risk level.
That wraps up our verdict on AI investing apps. Make sure to conduct thorough research into different options before making any decisions about where to put your money in 2024.
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Disclaimer: When investing your capital is at risk. Remember, the value of any investment can both rise and fall. Always do your own research.
MoneyMagpie is not a licensed financial advisor. Information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.
