Investment analysis AI raises $3 million

David Plon believes artificial intelligence can give every financial advisor their own in-house, hedge fund-quality investment analyst.

That’s the vision for Portrait Analytics, the AI company Plon, a former investment analyst, founded in 2022. On Thursday, Plon announced that Portrait Analytics raised $3 million in pre-seed funding led by 406 Ventures.

Like ChatGPT, which is now being used to power an internal chatbot for financial advisors at Morgan Stanley, Portrait Analytics is a generative AI that can produce original text in response to an inquiry. Using data on publicly traded companies, such as regulatory filings and earnings transcripts, it can answer questions about a company and produce summaries of key information.

“Rather than a keyword search or reading through a transcript, just ask it a question, like ‘What is Capital One saying about consumer credit quality trends?’” Plon said.

Instead of having to pour through a few years’ worth of earnings transcripts to decide whether a company is a good investment opportunity, Portrait Analytics can create a single page containing the important takeaways and questions that analysts are asking. “We’re taking a task that would take two to three weeks and turning it into two or three hours,” Plon said.

While the initial product is built as an aid for investment analysts, Plon plans to expand its functionality to financial advisors “in the very near future.” For example, advisors could use the AI to give more informed answers to client questions, or do more insightful research into the third-party asset managers.

Eventually, Portrait Analytics will be able suggest ideas, build financial models and write memos and pitch decks — everything that would typically be asked of a junior investment analyst, Plon said.

“What we’re building is an AI personal research assistant to increase the speed at which investors can research and discover investment opportunities,” he said.

In doing due diligence into Portrait Analytics, 406 Ventures co-founder and managing partner Liam Donohue said his team spoke to dozens of investment analysts, who detailed a painstaking and inefficient process for researching companies.

“Over and again, they lamented the lack of a technology solution that could help them make better decisions faster,” Donohue said in a statement. “It quickly became obvious that the experience, expertise and vision that David and his team bring to building Portrait will be transformative in solving this massive and important problem.”

Portrait will use the pre-seed investment to hire more people and enhance the AI’s model training and increase the data set it works with. The company is currently in a private beta testing phase and plans to provide access to people on its waiting list in the coming months.  

The mainstream success of generative AI like ChatGPT has inspired a wave of new development in the advisor fintech. In addition to Morgan Stanley, marketing fintech FMG Suite and turnkey asset management provider Orion Advisor Solutions have revealed plans for incorporating generative AI into their products.

[More: Fintechs finding new ways to bring AI to advisors]