Prediction markets continue to emerge as a data set for financial services providers to analyze economic and geopolitical events, a chief analyst for Goldman Sachs explained at the company’s third-annual RIA Professional Investor Forum in New York.
“You're asking an analyst to choose his favorite data source. I look at all of them. I have AI combine Kalshi, Polymarket, anything else I can find, and aggregate them across my screen,” said Ben Snider, Goldman Sachs’ chief US equity strategist.
Snider said he was relying on prediction markets to assess the impact of supply chain shortages due to Strait of Hormuz restrictions amid the war in Iran. He was asked a question that referenced Mosaic, a fertilizer producer facing rising costs of key ingredients such as sulfuric acid, and his concerns around other molecule shortages across oil, helium, and gas supply chains.
“I find myself relying on [prediction markets] more and more as an indicator of what the markets are really thinking. At least as of this morning, they were suggesting the Strait would be fully reopened by late summer, early fall. In that case, most of our analysts think we have enough molecules to get us from here to there,” said Snider. “The clock is working against us. So if that continues to get pushed back, I think the equity markets will be forced to revisit the optimism.”
JPMorgan has been assessing how its employees should be allowed to interact with prediction markets, while Schwab CEO Rick Wurster also sees their value to forecast employment or inflation rates. “I think that makes sense within the context of an investment portfolio, and we're absolutely open to having that on our platform, those types of prediction markets,” Wurster told Bloomberg in January.
Leading prediction markets Kalshi and Polymarket have been flooded with problematic insider trading cases. The Commodity Futures Trading Commission (CFTC) handles most oversight of prediction markets, but the industry remains in the infant stages of regulation.
“The SEC is very focused on how are you as a firm getting comfortable that your employees aren't walking in the morning and taking sensitive firm information and placing bets on Polymarket and Kalshi. What are you doing to prevent that? Is it in your code of conduct? Have you updated your policies? Have you done training? Do you do surveillance?,” said Carlo di Florio, president of ACA Group, a consulting firm for the financial services industry
Di Florio, who spoke this week at a media roundtable hosted by the ACA Group, was previously a chief risk officer at FINRA. Most prediction market trading volume on Kalshi, Polymarket, and Robinhood is tied to sports. CFTC chair Michael Selig told Axios this week that prediction markets and sports betting are "two separate things."
“All the same trading risks that we have on the other markets exist in prediction markets, but they exist on steroids, because this data is moving really fast, it's unregulated,” said di Florio. “So what's happening is that the CFTC has kind of acknowledged that we don't have effective regulation over the prediction markets. These are fundamentally derivatives contracts, futures, you're betting on a future event.”
Retiring RIA seller David Laidlaw alleges the Carnegie valued his stake on $11.7 million EBITA while pitching potential buyers on $21.3 million.
New tool gives RIAs and family offices AI help vetting private market deals, with some users reportedly halving review time.
Investors got projected returns dressed up as real ones, SEC says
Parents must still act to get the $1,000 federal seed and employer contributions, giving financial advisors a role in the rollout.
FINRA booted Rudy Anguiano from the industry for “conversion - the intentional and unauthorized taking of another person’s property.”
As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains