London-based FinTech company Algo-Chain has launched an AI-driven tool for the construction of ETF model portfolios.

Allan Lane, Co-Founder of Algo-Chain.

Aimed at financial advisors and wealth managers, the tool seeks to take the heavy lifting out of the fund selection and portfolio construction process, delivering risk-tailored portfolios in a matter of minutes.

The framework was developed by Algo-Chain’s founding partners Dr. Allan Lane and Dr. Irene Bauer, both of whom hold PhDs in Mathematics.

Acknowledging that some users will be more experienced than others, the tool has been developed with various interfaces. One version provides the user with full control over the selection of asset and sub-asset classes, whereas another reduces the decision burden to a bare minimum.

For a user’s given level of target risk, the tool captures current market conditions across asset classes to produce a set of portfolios that advisors can utilize as suggested asset allocations for client recommendations.

The tool is likely to appeal to advisors and wealth managers looking to simplify the construction of low-cost, core portfolios in order to free up more time for selecting satellite investments that match their clients’ interests and expectations.

Commenting on the launch, Allan Lane, Co-Founder of Algo-Chain, said: “With over 12,000 ETFs listed on exchanges globally, it is becoming a full-time occupation knowing which funds to include in any given portfolio. Consequently, if the insights that AI can bring to the process of fund selection leads to better outcomes and lower costs, then Advisors need all the automation tools they can lay their hands on.”

The model portfolio tool is offered through Algo-Chain’s online platform on a subscription basis with an introductory free 7-day trial.