V3I2P55

AI Vs Traditional Methods in Portfolio Management: A Comparative Study

Arunachalam G^1*, Dr. Suresh Mani²

Abstract

The rapid growth of artificial intelligence (AI) has significantly transformed the field of portfolio management, challenging the long-standing dominance of traditional human financial advisors. This study explores the comparative effectiveness of AI-driven and traditional portfolio management approaches, with particular focus on young investors in India. Using primary data collected from 69 respondents aged 18–29, along with secondary data from industry reports and academic literature, the research examines differences in performance perception, risk management, cost-effectiveness, trust, satisfaction, and future expectations.

The findings reveal high awareness of AI-based investment platforms (82.6%), but moderate actual adoption (26.1%), indicating a gap between familiarity and practical usage. A strong majority of respondents perceive AI platforms as more affordable than traditional advisory services, highlighting cost efficiency as a major advantage. Trust levels are relatively balanced between AI systems and human advisors, suggesting that investors value both technological efficiency and human judgment. Importantly, 69.6% of participants prefer a hybrid model that combines AI tools with human advisory support, rather than relying exclusively on either approach.

The study concludes that AI and traditional portfolio management methods are not direct competitors but complementary systems. While AI offers speed, data-processing capability, and lower costs, human advisors provide behavioral guidance, personalized planning, and strategic judgment. The future of portfolio management is likely to lie in integrated models that leverage the strengths of both approaches. These findings offer practical insights for investors, financial institutions, educators, and policymakers navigating the evolving landscape of digital finance.

Keywords:

Artificial Intelligence; Portfolio Management; Robo-Advisors; Traditional Financial Advisors; Hybrid Investment Models.