AI finance models lag in accuracy: Morningstar Chairman Mansueto

By Admin

30 Apr, 2025

In a world increasingly enamored with artificial intelligence, Morningstar Inc. Chairman Joe Mansueto offers a sobering reality check: AI still has a long journey ahead before it can truly transform financial analysis. Speaking at a recent University of Chicago conference, Mansueto emphasized that the current capabilities of AI in finance are exaggerated and overhyped, particularly when it comes to performing high-level analytical tasks.

Mansueto, who built his $6.3 billion fortune by delivering top-tier investment research and management, shared insights from a recent study by Vals AI, a startup he advises. The study evaluated the performance of over 20 different AI models by tasking them with 500 financial analysis questions. The outcome? Disappointing.

“None of the 20 scored over 50 percent,” Mansueto revealed, clearly highlighting the gap between AI hype and actual performance. “They asked them 500 questions,” he noted, adding that while improvements are expected over time, today's AI models are still far from replacing trained analysts.

Vals AI’s report echoed his concerns, stating that current AI systems are “ill-suited to perform open-ended questions expected of entry-level finance analysts.” This paints a stark contrast to the widespread belief that AI will seamlessly take over routine financial tasks.

Still, major financial institutions like Morgan Stanley, Citigroup Inc., and Bank of America Corp. are heavily investing in internal AI tools to streamline junior banking responsibilities, such as financial modelling, data entry, and document assembly. Proponents argue that this enhances efficiency, though skeptics warn it could hinder the development of critical analytical skills in younger professionals.

While Mansueto acknowledges the benefits of automation, he remains firm in his belief that human judgment and qualitative analysis continue to play an irreplaceable role in financial decision-making. “The rise of AI models that are getting better all the time means analysts will have to keep running faster,” he said. “But the human element still matters.”

Founded in 1984 out of his Chicago apartment, Morningstar has grown into a global financial powerhouse. By the end of 2024, Morningstar Wealth managed approximately $338 billion in assets, a testament to its enduring relevance and trusted insights.

In the face of market volatility spurred by policy changes, such as the Trump administration's tariffs, Morningstar's long-term client contracts — typically spanning three years — provide a cushion against short-term shocks. “If it’s volatile, our clients tend to pause, take a step back,” Mansueto noted. “It’s policy-induced volatility. I think we’ll get through this.”

Mansueto’s grounded outlook serves as a timely reminder: while AI is a powerful tool, it is not a silver bullet — at least not yet. For now, the intersection of finance and technology remains a space where human expertise is still essential, and perhaps, irreplaceable.