Wealth Management Stocks Plunge as AI Tool for Tax Planning Sparks Disruption Fears

Wealth Manager Stocks Sink as New AI Tool Sparks Disruption Fear

Tax planning and wealth management stocks sank Tuesday after financial software provider Altruist Corp. launched an artificial intelligence tool for creating tax strategies, sparking concerns that traditional players could be at risk. Shares of Charles Schwab Corp. fell as much as 8.1%, with other wealth management stocks also taking a hit. Raymond James Financial Inc. dropped 8.5%, LPL Financial Holdings Inc. slid 8.4% and Stifel Financial Corp. sank 7.2%. Altruist's new tool, unveiled on Tuesday, helps financial advisors personalize strategies for clients and create pay stubs, account statements and other documents, the company said in a statement. "The selloff appears tied to broader concerns about AI disrupting the financial advice and wealth management model," said Neil Sipes, an analyst with Bloomberg Intelligence. Investor focus today is "likely centering on concerns around efficiencies being competed away, fee compression long-term and potential market share shifts." Insurance brokers' stocks had a similar meltdown Monday after Insurify's new rate-comparison AI tool raised concerns about those companies' businesses. The threat to traditional business models across industries from the advent of new AI-powered applications has started spreading into many corners of the stock market, starting with the software firms. The jitters really struck investors last week after AI startup Anthropic released tools aimed at automating work tasks across areas ranging from legal services to financial research.

UK wealth managers stocks tumble as AI fears ripple across Europe

MILAN, Feb 11 - UK wealth management stocks St James's Place and Quilter fell sharply on Wednesday, as concerns over potential disruption from artificial intelligence spread to the broader European financial sector, following a steep selloff in U.S. rival stocks. A gauge of European financial services shares (.SXFP), opens new tab fell as much as 1.8% by 0923 GMT, with St James's Place (SJP.L), opens new tab down more than 10% at one point and Quilter (QLT.L), opens new tab sliding as much as 6.1%, both hitting their lowest levels since December. Shares in LSEG (LSEG.L), opens new tab, already hit by a selloff last week that wiped out nearly $1 trillion in value from across the global software sector, rose 2% after activist investor Elliott was reported to have built a stake and begun engaging with the company to drive performance. Shares of U.S. brokerages sold off on Tuesday after wealth management startup Altruist introduced AI‑enabled tax‑planning features, as the still-nascent technology continues to fuel fears over disruption to incumbents. Analysts at RBC Capital Markets said the reaction in UK wealth manager stocks appeared driven more by short‑term positioning than any fundamental shift, noting the selloff mirrored larger declines in U.S. wealth shares. "If shares do continue to display volatility in response to subsequent developments, we expect this to reignite the man vs machine debate in delivery of financial advice/WM," they wrote in a note. Elsewhere across European financials, Italian asset managers were also heavily hit, with Banca Mediolanum (BMED.MI), opens new tab and Azimut (AZMT.MI), opens new tab down 5.6% and 3.8%, respectively. Other big decliners on Wednesday included online trading platforms FlatexDEGIRO (FTKn.DE), opens new tab and Swissquote (SQN.S), opens new tab. Reporting by Danilo Masoni; Editing by Amanda Cooper Our Standards: The Thomson Reuters Trust Principles., opens new tab

The AI threat wrecked software stocks. Now broker stocks look next with LPL down 11%

Financial stocks are the latest to fall on AI threats. Software stocks have also been hit. Shares of financial services firms tanked Tuesday after the launch of a new tax planning tool powered by artificial intelligence that promises to do the work "within minutes." LPL Financial tumbled nearly 11%, while Charles Schwab and Raymond James Financial both dropped more than 9% amid fears that AI will disrupt their industry next. Morgan Stanley dropped 4%. Tech platform Altruist announced the offering within its AI platform, Hazel, and said it "helps advisors create fully personalized tax strategies for clients by reading and interpreting their 1040s, paystubs, account statements, meeting notes, emails, and custodial and CRM data, and applying deep tax logic to the analysis."

US brokerages fall as AI-driven rout extends to financials

Feb 10 (Reuters) - Shares of U.S. brokerages fell on Tuesday after wealth management startup Altruist introduced AI-enabled tax planning features, as the still-nascent technology continues to fuel disruption fears for the incumbents. The selloff reflects growing investor anxiety toward legacy financial and tech firms as AI-first startups automate complex tasks that were long the exclusive domain of expensive human advisors. Charles Schwab (SCHW.N), opens new tab slipped 6.4%, LPL Financial (LPLA.O), opens new tab dived 8.3%, Raymond James Financial (RJF.N), opens new tab was down 7%, and Stifel Financial (SF.N), opens new tab fell 6.5%. Wall Street giant Morgan Stanley (MS.N), opens new tab fell 2.8%, while Ameriprise Financial (AMP.N), opens new tab slipped 6%. Financial markets, juiced for months with investor enthusiasm about the AI trade, were jolted last week as global software stocks sank on worries of disruption by vibe coding AI tools. Founded in 2018, Altruist acts as a self-clearing brokerage for investment advisers, offering a unified platform for account opening, trading, reporting and billing. Integrated into its Hazel AI platform, its latest feature automates the creation of personalized tax strategies by instantly analyzing client documents like 1040s, pay stubs and meeting notes. "Looks like it could potentially disrupt some of the retail brokerages. That's why the stocks are selling off here right now," said Dennis Dick, chief market strategist at Stock Trader Network, referring to Altruist's latest launch. Insurgent brokerages, including Robinhood and rival Public, have already been making headway into the sector via their low-cost and tech-enabled offerings. In November, Public launched an AI-powered brokerage that lets users build their own ETFs to invest in. Robinhood offers its Gold subscribers an AI-powered investing assistant that allows users to chat through trading ideas and enact orders. "When you get just one little thing, traders sell first and ask questions later. Every time we get one of these headlines, another sector bites the dust," Dick added. Reporting by Ateev Bhandari in Bengaluru, additional reporting by Purvi Agarwal; editing by Alan Barona Our Standards: The Thomson Reuters Trust Principles., opens new tab

UK wealth manager and price comparison site shares fall amid AI fears

Drop comes as AI firm Altruist launches service that helps advisers create personalised tax strategies Wealth managers and price comparison sites have become the latest companies to be hit by fears that their businesses will be disrupted by new artificial intelligence innovations. Shares in UK wealth management firms tumbled on Wednesday morning, after the AI company Altruist Corp launched a service that it said helps advisers create personalised tax strategies by reading clients' pay stubs, account statements and other documents. The UK wealth manager St James's Place fell almost 10% in early trading, with the rival Quilter down 5.2% and AJ Bell losing 5.7%, as investors anticipated that agentic tools that can sort tax affairs, or provide advice, could eat into their revenues. "Fresh casualties from AI advances are falling on the investment landscape," warned Susannah Streeter, the chief investment strategist at Wealth Club. "The big reveal from tech startup Altruist Corp, which is led by former Wall Street professionals, is a new tool helping financial advisers personalise tax strategies for clients and deal with all the admin. The worry is that this is just the tip of the iceberg and fresh efficiencies will be unleashed by AI to disrupt the financial advice and investment industry and reduce the fees which can be charged. As the AI cards are shuffled, the pile of potential losers is mounting up, and speculation about which sector will be hit next is rife," Streeter added. Shares in two of the UK's largest price comparison sites continued to slide on Wednesday, adding to losses in the previous session. The owner of Moneysupermarket, Mony Group, fell 2% in early trading on Wednesday, after they closed 12% down on Tuesday, after a sell-off pushed its shares to their lowest level in 13 years. The Go.Compare owner, Future, was trading 2.7% lower on Wednesday morning, after the previous day's 3.6% fall. Investors have become nervous about the prospect of disruption from AI and other new technologies, after the US company Insurify launched a new service allowing users to compare car insurance quotes directly using OpenAI's ChatGPT. In addition, the Spain-based digital insurer Tuio is to provide home insurance quotes directly to ChatGPT users, and other companies are expected to follow suit, adding to fears that consumers seeking car, home and travel insurance could turn to chatbots to gather and compare quotes. Mony Group owns brands including Moneysupermarket and TravelSupermarket, as well as the cashback website Quidco and MoneySavingExpert, the personal finance help site started by Martin Lewis. Future is one of the most shorted UK stocks, as investors have placed bets that its value will fall further. Insurify's founder and chief executive, Snejina Zacharia, said the company was "redefining the insurance shopping experience by making it feel as simple as having a conversation". She added: "Drivers can ask questions in plain language, explore personalised quotes, and review real customer feedback, all in one place". Insurance and wealth management are the latest sectors to suffer big share price drops this year as a result of fears about the impact of AI, after falls in publishing and legal software companies and advertising firms. "Getting an insurance quote through ChatGPT makes perfect sense as many people are now using chatbots to obtain information on products and services, said Dan Coatsworth, the head of markets at the broker AJ Bell. "The share price slump in the owners of Moneysupermarket and Go.Compare suggests ... comparison portals will have to quickly find a way to get in on the game, such as embedding their services into ChatGPT and potentially offering bigger incentives to prospective customers as well as getting their brand to appear prominently in search results." Recent declines in software companies came after the US artificial intelligence startup Anthropic, the company behind the chatbot Claude, revealed a tool for use by companies' legal departments. Anthropic said the tool could automate legal work such as contract reviewing, non-disclosure agreement triage, compliance workflows, legal briefings and templated responses. The news hit shares in the UK publishing group Pearson, the information and analytics company Relx, as well as the software company Sage.

AI fears hit wealth management and price comparison stocks

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. The sharp drop in share prices after the launch by the AI company Altruist Corp of a service that helps advisers create personalised tax strategies by reading clients' pay stubs, account statements and other documents. The UK wealth manager St James's Place fell almost 10% in early trading, with rival Quilter down 5.2% and AJ Bell losing 5.7%, as investors anticipated that agentic tools that can sort tax affairs, or provide advice, could eat into their revenues. Shares in two of the UK's largest price comparison sites continued to slide on Wednesday, adding to losses in the previous session, following the launch by Insurify of a new service allowing users to compare car insurance quotes directly using OpenAI's ChatGPT. The owner of Moneysupermarket, Mony Group, fell 2% in early trading on Wednesday, after closing 12% down on Tuesday. The Go.Compare owner, Future, was trading 2.7% lower on Wednesday morning, after the previous day's 3.6% fall. The latest share price slump follows declines in legal and data publishing firms after the US artificial intelligence startup Anthropic unveiled a tool to automate legal work such as contract reviewing, non-disclosure agreement triage, compliance workflows, legal briefings and templated responses.

US Stocks Today | AI fears hit US wealth managers: Why stocks sank and what's next

US wealth management and brokerage stocks suffered a sharp selloff after a new artificial intelligence tool reignited fears that parts of the industry's core business could face disruption from automation. Shares of major players such as Charles Schwab, Raymond James, LPL Financial, Ameriprise Financial and Stifel Financial fell between 6% and 9% in a single session, making the group one of the worst-performing pockets of the US financial sector. What triggered the selloff? The immediate catalyst was an announcement by fintech firm Altruist, which unveiled an AI-powered tax-planning feature for its Hazel platform. The tool is designed to automatically analyse client documents -- including tax returns, pay stubs and account statements -- and generate personalised tax strategies for financial advisors. While Altruist primarily serves registered investment advisors (RIAs) and is far smaller than incumbents such as Schwab or Fidelity, investors reacted to the broader implication: that artificial intelligence is beginning to automate higher-value advisory functions that were previously protected by human expertise. According to Reuters and Bloomberg, the market interpreted the announcement as a potential threat to fee-based revenue, especially in areas like tax optimisation, financial planning and client servicing -- key profit centres for wealth managers. The concern is that AI tools could compress fees, reduce the need for large advisory teams and erode the competitive moat that large firms have built around personalised service. Why was the reaction so severe The selloff also reflects broader investor anxiety about AI-driven disruption spreading across professional services. In recent days, similar fears have hit software companies and insurance brokers after other AI tools were launched to automate research, underwriting and legal tasks. Barron's noted that wealth management stocks were already trading at premium valuations due to their steady cash flows and strong client relationships. That made them vulnerable to a sudden repricing when investors began to question how defensible those earnings would be in an AI-driven future. Even the hint that technology could challenge traditional advisory models was enough to trigger aggressive profit-taking. Adding to the pressure, weak US economic data and falling Treasury yields have raised concerns about slower growth, which could also weigh on asset inflows and trading activity -- another headwind for brokerage firms. What analysts are saying Despite the sharp market reaction, many analysts argue the selloff may be an overreaction in the near term. Several point out that AI tools are more likely to complement human advisors rather than fully replace them, especially in areas involving behavioural coaching, trust-based relationships and complex financial decision-making. Reuters reported that some market participants believe established firms still have strong advantages, including deep client relationships, proprietary data, regulatory infrastructure and brand trust -- all of which are difficult for fintech challengers to replicate quickly. From this perspective, AI could ultimately improve productivity and margins for large players that successfully integrate the technology into their platforms. Morningstar, in its analysis, also suggested that long-term investors should maintain exposure to quality wealth management firms, arguing that the industry's structural strengths remain intact despite short-term volatility. Also Read | Fallen angels return: Smallcaps stocks emerge from the shadows as Q3 earnings finally flip the script In the coming months, investors are likely to focus on three key developments: Large firms such as Schwab, Morgan Stanley and Ameriprise are expected to accelerate their own AI rollouts. The market will closely watch whether they can use AI to enhance advisor productivity and defend margins. Any evidence that AI is leading to lower advisory fees or reduced demand for traditional planning services could keep pressure on valuations. Management guidance in upcoming earnings calls will be critical. Investors will look for clarity on how firms see AI affecting costs, client acquisition and long-term growth. For now, the episode highlights a broader theme on Wall Street that artificial intelligence is no longer just a growth story for tech stocks; it is increasingly seen as a disruptive force across financial services. That shift is forcing investors to reassess which business models are most resilient in an AI-driven world, and which may need to adapt faster than expected.

Wealth management and tax prep stocks sink as Altruist launches new AI tool

Wealth management and tax planning companies fell on Tuesday after privately held financial software provider Altruist Corp. launched an AI tool that creates tax strategies for clients, generating concerns for other companies. Among the top decliners were LPL Financial Holdings ( The AI tool could threaten traditional firms by automating tax strategy creation, leading to concerns about losing efficiencies, fee compression, and market share shifts. Firms like LPL Financial, Schwab, and Raymond James dropped sharply in price due to concerns over AI-driven competition. Investors fear that AI will streamline services, intensifying competition, lowering fees, and potentially eroding margins for existing companies.

US brokerages fall as AI-driven rout extends to financials

Feb 10 (Reuters) - Shares of U.S. brokerages fell on Tuesday after wealth management startup Altruist introduced AI-enabled tax planning features, as the still-nascent technology continues to fuel disruption fears for the incumbents. The selloff reflects growing investor anxiety toward legacy financial and tech firms as AI-first startups automate complex tasks that were long the exclusive domain of expensive human advisors. Charles Schwab slipped 6.4%, LPL Financial dived 8.3%, Raymond James Financial was down 7%, and Stifel Financial fell 6.5%. Wall Street giant Morgan Stanley fell 2.8%, while Ameriprise Financial slipped 6%. Financial markets, juiced for months with investor enthusiasm about the AI trade, were jolted last week as global software stocks sank on worries of disruption by vibe coding AI tools. Founded in 2018, Altruist acts as a self-clearing brokerage for investment advisers, offering a unified platform for account opening, trading, reporting and billing. Integrated into its Hazel AI platform, its latest feature automates the creation of personalized tax strategies by instantly analyzing client documents like 1040s, pay stubs and meeting notes. "Looks like it could potentially disrupt some of the retail brokerages. That's why the stocks are selling off here right now," said Dennis Dick, chief market strategist at Stock Trader Network, referring to Altruist's latest launch. Insurgent brokerages, including Robinhood and rival Public, have already been making headway into the sector via their low-cost and tech-enabled offerings. In November, Public launched an AI-powered brokerage that lets users build their own ETFs to invest in. Robinhood offers its Gold subscribers an AI-powered investing assistant that allows users to chat through trading ideas and enact orders. "When you get just one little thing, traders sell first and ask questions later. Every time we get one of these headlines, another sector bites the dust," Dick added. (Reporting by Ateev Bhandari in Bengaluru, additional reporting by Purvi Agarwal; editing by Alan Barona)