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)
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