Shares in financial services companies plummeted on Tuesday following the introduction of a new tax planning tool using artificial intelligence that claims to accomplish tasks “in minutes.”
LPL Financial ended the day 8.31% down after falling 11% during midday trading, while Charles Schwab decreased by 7.42% and Raymond James Financial saw an 8.75% decline amid concerns that AI may disrupt their market next. Morgan Stanley fell by 2.4%.
The tech platform Altruist revealed the solution through its AI platform, Hazel, stating that it “assists advisors in crafting fully customized tax strategies for clients by interpreting and analyzing their 1040s, pay stubs, account statements, meeting notes, emails, and CRM data, applying intricate tax logic to the evaluation.”
It seems that investors are apprehensive about AI taking over certain lucrative services provided by established financial advisory firms, or at least undermining their profit margins.
This trend was observed earlier in the year with the software stocks when Anthropic’s newest AI model showcased its ability to enable businesses to conduct legal tasks and develop software that would normally require costly licenses.
The iShares Expanded Tech-Software ETF (IGV) has decreased by 19% this year as shares of companies like ServiceNow and LegalZoom have plummeted.
The iShares U.S. Broker-Dealers and Securities ETF experienced a 3.13% drop on Tuesday.
