AI-Induced Selloff Hits Wealth Management Stocks

A recent selloff in wealth management stocks has been triggered by the launch of an artificial intelligence (AI) tool by Altruist Corp., named Hazel. This tool, designed to assist financial advisers in creating personalized tax strategies, has raised concerns about the potential for AI to disrupt traditional roles within the financial services sector. On February 10, 2026, shares of major firms such as Charles Schwab Corp., Raymond James Financial Inc., and LPL Financial Holdings Inc. experienced significant declines, with LPL falling nearly 11% and Charles Schwab and Raymond James dropping over 9% amid fears of being outcompeted by automated solutions.

BloombergCNBCBloombergServiceNow's Massive Fall: Analysts Eye +70% Gains Amid AI Risks

The financial services industry has been increasingly wary of AI's potential to automate tasks traditionally performed by human advisers. Altruist's Hazel tool exemplifies this trend, as it can analyze client data and generate tax strategies efficiently, potentially replacing entire teams of wealth managers. This shift follows a broader pattern where AI advancements have already impacted sectors like software engineering and insurance, leading to widespread sell-offs across various industries.

Bloomberg

Jason Wenk, CEO of Altruist, acknowledged the unexpected scale of the market's reaction, stating, “It’s dawning on people — this architecture we’re using to build Hazel, it can replace any job in wealth management.” Analysts like Michael Brown from UBS have noted the high uncertainty in the market, emphasizing the difficulty in predicting the future of companies affected by AI disruption. Meanwhile, Ross Gerber, CEO of Gerber Kawasaki, cautioned that the fears surrounding AI's impact may be premature, as the technology's long-term effects remain uncertain.

Bloomberg

Despite the panic, some analysts argue that the market's reaction may be overblown. Wilma Burdis from Raymond James Financial described the selloff as “completely overblown,” suggesting that clients still prefer human advisers for trust and personalized service. Michael Arougheti, CEO of Ares Management, expressed confusion over the sudden market anxiety regarding AI disruption, indicating that the public markets may have reacted too hastily.

Bloomberg

While some analysts warn of significant risks posed by AI to traditional financial roles, others believe that the actual threat may be overstated. The selloff has been characterized by a “sell-first, ask-questions-later” mentality, with investors reacting to new AI product announcements without fully assessing their implications. This has led to a volatile market environment, where stocks are sold off indiscriminately based on perceived risks rather than concrete evidence.

Bloomberg

In response to the turmoil, executives from major asset management firms have attempted to reassure investors that fears of AI disrupting their business models are exaggerated. They emphasize that while AI will change the landscape, it will not eliminate the need for human oversight in financial advising.

Bloomberg

• “It’s dawning on people — this architecture we’re using to build Hazel, it can replace any job in wealth management,” — Jason Wenk, CEO of Altruist Corp.

Bloomberg

• “Uncertainty is really high and it’s very hard to kind of disprove a negative,” — Michael Brown, Analyst at UBS.

Bloomberg

• “Completely overblown,” — Wilma Burdis, Analyst at Raymond James Financial Inc.

Bloomberg

As the financial sector grapples with the implications of AI, the coming months will likely see continued volatility in stock prices as investors reassess the risks and opportunities presented by new technologies. The industry must navigate these changes while maintaining client trust and adapting to an evolving landscape.

Bloomberg