There’s no shortage of buzz about quantum computing these days, and rightfully so. Quantum computers have the potential to unlock new answers and solve new problems by performing functions not only faster than standard computers, but also in entirely new ways.
Depending on who you ask, the industry is anywhere from years to decades away from commercial viability, and no one really knows when that next physics breakthrough will happen to accelerate the pace. While it’s unclear when these computers will reach their full potential, there’s no question that they’ll have the power to change the way we work.
Why should wealth management firms be paying attention to quantum and how might advisors use it in the future? Quantum computers have the potential to help advisory firms be more efficient and grow their businesses.
There’s a lot of potential out there, including opportunities around optimization problems, which seek out the best solutions out of the universe of possible options for minimizing risk, cost, time, resources and more, and machine learning. What’s more, because there are a variety of quantum computers, there are many different approaches with which to solve problems by combining different types of computers.
Solving optimization problems faster
Think about an advisor running a Monte Carlo simulation to determine if a client’s portfolio will be likely to last through their retirement. The simulation takes uncertain or unknown variables (for example, future market performance), assigns them random values and then repeatedly runs that process to show a distribution of potential likely outcomes. This distribution gives the likelihood of the desired outcome — that the portfolio is likely large enough for retirement.
With today’s computers, this method requires many iterations to be reliable and, therefore, a lot of time — even a matter of days for simulations with many variables.
Quantum computing has the potential to change that. With a quantum computer, quantum bits (or qubits) have a partial chance of being a 0 AND a partial chance of 1 — unlike their binary counterparts in standard computers, which can only be one or the other. That means the qubits can essentially be split in the
Accelerating and improving machine learning
Machine learning — in which artificial intelligence imitates the way humans learn, gradually improving at the task — as it exists today is already exciting, and quantum computers might give the ability to train and test more effectively, and score better. Advisors often think about AI as a tool to help them better understand their clients’ needs and identify where they should focus to maximize impact. Imagine the possibilities if meaningful insights could be modeled faster and more accurately in the future. We are already seeing evidence that quantum computers can improve the output quality of generative AI models like the ones that create new text, images and audio content.
Hybrid quantum-to-quantum solutions
There is an expanding landscape of quantum computers, each with its own set of strengths and weaknesses. Many are currently purpose-built to complete specific types of tasks, such as random number generation or finding minimum energy solutions. Combining them into hybrid models will enable us to leverage the strengths of the different technologies and unlock new possibilities.
While still in the exploratory stages, the Fidelity Center for Applied Technology recently worked with the Amazon Quantum Solutions Lab to use Amazon Braket — a cloud-based quantum computing platform — to
What could proofs of concepts like this mean for the wealth management industry? Advisors could potentially perform deeper analyses than they do today, including looking at more complex scenarios with more variables than they can currently analyze, helping to deliver even more value to investors.
Although we are still in the early days, quantum computing has already shown potential to positively disrupt the technology that we use today and make an impact on the way we work. Now is the time to think tangibly about how to best leverage the benefits of quantum computers so that we’re prepared to make the most of them when they reach commercial viability.
