Refinitiv Equips Wealth Managers with Quantitative Behavioral Economics Tool to Monitor Global Market Psychology
New Alternative Data Set MarketPsych Indices, First of Its Kind, Provides Unparalleled Insight
Refinitiv reinforced its commitment to the wealth management industry with the launch of a proprietary data set MarketPsych Indices (RMI) via a new cloud-based feed for brokerages, investment advisers, wealth managers and their clients. The new tool is the first of its kind for wealth managers, and it provides an unparalleled capability to visualize media perceptions – buzz, themes, emotions – and make assessments in correlation to asset prices.
“As the global wealth management industry continues to adapt to rapidly changing customer behavior, we are thrilled to equip our clients with tools that allow them to meet their customer needs”
The RMI were developed in conjunction with MarketPsych Data LLC, a leading developer of quantitative behavioral economics tools. The RMI analyze news and social media in real time, converting the volume and variety of professional news and social media into manageable information flows.
The underlying text analysis process converts qualitative statements in the media – such as expressions of fear, asset price forecasts, and mistrust in management – into quantitative, actionable insights. With analytics on over 15,000 global companies, 187 countries’ macroeconomic indicators, 62 sovereign bonds and country stock indexes, 45 currencies, 36 commodities, and 150 cryptocurrencies. The RMI give investors insight into the psychological forces that drive market movements.
“As the global wealth management industry continues to adapt to rapidly changing customer behavior, we are thrilled to equip our clients with tools that allow them to meet their customer needs,” said Sarlota Hohwald, Director, Data Platform for Wealth Management at Refinitiv. “Our new MarketPsych Indices offering will provide investors a view into the mindset of the market so they can better predict its future behavior. It will also answer the need for alternative data that easily identifies signals from the noise and enables users to find actionable insight based on sentiment and emotional intricacies developing a deeper and more engaged understanding of market price moves.”
Refinitiv’s wealth management business supports a significant number of established and emerging wealth customers providing global, regional and emerging market wealth platforms across the Americas, Europe, and Asia.
“From our clients across 22 countries, we heard strong demand for actionable visualizations of media sentiments,” said Dr. Richard Peterson, CEO of MarketPsych. “Market prices often rise and fall on the back of news and social media information, sometimes overreacting and sometimes trending slowly – our customers anticipate such reactions. With this data, wealth managers have seen how media moves markets and economies, found new investment ideas, and prevented portfolio volatility by de-risking before market corrections.”
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William Trout, Head of Wealth Management at Celent, said: “The proliferation of alternative data speaks to the need for tools to make sense of the market. The MarketPsych Indices offer context that clients and advisors can access on a personalized and immediate basis.”
Will Jan, Vice President & Lead Analyst at Outsell, said: “While there is a strong uptick in robo financial advisories, even among high-net worth investors, our studies have shown that during a volatile market, many of these investors continue to default to personal advisors for advice. As such, it’s critical that investment planning professionals help their clients decipher between market movements based on fear and those based on solid fundamentals.”
Refinitiv MarketPsych Indices analyze news and social media in real time across 2,000 top global news sites and 800 global financial social media sites. TRMI converts the volume and variety of professional news and social media into manageable information flows that can help drive investing decisions and risk management across asset classes. The data is designed to be seamlessly incorporated into both quantitative and qualitative analysis to help enable investment and other professionals to quickly discern patterns affecting their respective businesses. MarketPsych’s text analytics engine uses patented natural language processing software.