AI Disruption Fears Slam Charles Schwab, Wealth Managers

Brokers and wealth managers retreated the past week after startup wealth platform Altruist on Tuesday announced a new artificial intelligence-powered tax software. The likes of Charles Schwab and Raymond James retreated sharply Tuesday, breaking below key levels.

Los Angeles-based Altruist on Tuesday announced an innovation for its AI-powered platform, Hazel, that can produce personalized tax insights and strategies for wealth advisors. The new capability can read and interpret 1040 filings, paystubs, emails and other account statements, to provide tax analysis and insights to advisors and their clients.

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The capability also provides interactive scenario modeling, to project expected impacts of bonuses, home sales, retirements and other life changes.

The release noted that Hazel does not retain data from Altruist or its customers. The company also plans to make the Hazel tax planning tool available to firms regardless if they custody assets with Altruist.

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“Tax planning is one of the most powerful ways advisors can improve outcomes, but it’s also slow and mentally draining, especially during the tax season,” said CEO Jason Wenk. “Hazel’s tax planning feature flips that dynamic. It expands what a single advisor can handle, raises the bar on outcomes, and makes average advice a lot harder to justify.”

Brokers and wealth managers retreated after the announcement. Bloomberg analyst Neil Sipes noted that the sell-off “appears tied to broader concerns about AI disrupting the financial advice and wealth-management model,” according to reports.

Sipes added that investor focus is “likely centering on concerns about efficiencies being competed away, fee compression long-term and potential market-share shifts.”

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Raymond James (RJF) plunged 8.8% Tuesday to lead declines for brokers. RJF stock, which was near a buy point, gapped below its 50-day and 200-day lines. Shares closed the week with a loss of about 8%.

Charles Schwab (SCHW) fell 3.8% Wednesday following its 7.4% drop Tuesday. For the full week, Schwab shares lost more than 10%. Tuesday’s drop took the stock below the 50-day moving average and it remained below that important level. On Friday, the stock slipped below the 200-day line.

LPL Financial (LPLA) tumbled 8.3% Tuesday and about 13% for the full week. The stock also broke below key levels such as the 50-day and 200-day moving averages. Shares tried to break out past a 395.75 buy point but are now 16% below that entry.

Ameriprise Financial (AMP) dropped 3.9% Wednesday and retreated about 13% for the week. It closed below the 5o-day and 200-day lines. Stifel Financial (SF) lost nearly 9% for the week. It is below the 50-day average but still forming a flat base.

JPMorgan Chase (JPM) and Wells Fargo (WFC) on Wednesday fell below their 50-day lines and lost 6% and 8%, respectively, for the week. Both are still forming flat bases but have sunk to the lows of those patterns.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison.

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