A new artificial intelligence tool designed to create tax strategies has triggered a significant selloff in wealth-management stocks. Investors are concerned the industry could be at risk from automated advice, mirroring recent reactions to AI advancements in software and insurance brokerage sectors. The selloff appeared to catch Wall Street off guard, with most analysts maintaining positive ratings on affected stocks.
Charles Schwab, Raymond James Financial, LPL Financial Holdings, and Stifel Financial all experienced substantial declines, heading towards their worst trading day since April, with shares plummeting between 7% and 8%. This decline reflects investor apprehension about the potential for AI to disrupt established financial advisory practices.
The new tool was unveiled by Altruist, a technology startup. Altruist develops technology that helps financial advisors serve their clients. Their new tool helps advisors personalise strategies and create documents, the company said in a statement. Altruist’s founder and CEO, Jason Wenk, previously worked at Morgan Stanley, while COO Mazi Bahadori has a background with Pimco Investment Management.
According to Bloomberg Intelligence analyst Neil Sipes, “The sell-off appears tied to broader concerns about AI disrupting the financial advice and wealth-management model.”
