Morningstar Inc chairman Joe Mansueto. — Bloomberg
NEW YORK: Financial models based on artificial intelligence (AI) are a long way from being able to compete with market research firms, says Morningstar Inc chairman Joe Mansueto, who built a fortune by providing investment reports, research and management.
Mansueto pointed to a recent study in which Vals AI, a startup he advises, examined the accuracy of financial analysis performed by more than 20 AI models.
The results fell short of passing grades, he said.
“None of the 20 scored over 50%. They asked them 500 questions,” Mansueto said at a University of Chicago conference.
While the performance will improve over time, he said, AI’s current capabilities in finance “are exaggerated, and it has a long way to go”.
Vals AI said in its report that AI models are “currently ill-suited to perform open-ended questions expected of entry-level finance analysts.”
Boosters said AI will help streamline tedious responsibilities of junior bankers such as financial modeling, data entry and assembling deal documents.
Despite concerns that reliance on AI will erode some of the skills young professionals need as they move up the ranks, that hasn’t stopped the likes of Morgan Stanley, Citigroup Inc and Bank of America Corp from developing internal AI technology for their employees.
The rise of AI models that are getting better all the time means analysts will have to “keep running faster”, Mansueto said.
But he added that the humans also bring qualitative elements to their work that will continue to be important.
Mansueto, whose net worth is valued at US$6.3bil according to the Bloomberg Billionaires Index, started Chicago-based Morningstar out of his apartment in 1984.
Morningstar Wealth had about US$338bil in assets under management at the end of 2024.
With client contracts that typically last three years, Morningstar is somewhat insulated from market instability caused by the Trump administration’s tariffs, Mansueto said.
While the turbulence “certainly affects” clients’ assets under management, he said he expects to be able to weather the storm.
“If it’s volatile, our clients tend to pause, take a step back,” he said at the conference in Chicago last week.
“It’s policy-induced volatility. I think we’ll get through this.” — Bloomberg
