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Shares in some of the UK’s largest wealth managers tumbled on Wednesday as investors grew concerned about the potential competitive pressure from a new AI-led investment tool, with AI having already rattled major players in data, personal finance and insurance in recent days.
Britain’s biggest wealth group, St James’s Place, suffered a 12.7 per cent drop, trading at 1,265 pence, after US-based wealth management platform Altruist launched a tool to help financial advisers personalise clients’ investment strategies.
The development from the LA-headquartered company spooked investors, sparking fear across the market about how rapid technological advancements may undermine the traditional aspects of the industry.
St James’s Place was not the only UK company in the firing line, as AJ Bell’s share price slumped 4.8 per cent to 434.6 pence, down from its prior close of 455.8 pence.
Wealth manager Quilter dropped 5.1 per cent, while Aberdeen Group also reported a 4.5 per cent drop and Schroders slipped 2.3 per cent.
It’s a significant blow for UK wealth managers, who have seen a surge in inflows in recent months.
St James’s Place reported a 19 per cent year on year increase in its latest results, with inflows reaching £21.8bn, as the company looked to move past its turbulent 2024.
Elsewhere, AJ Bell recorded inflows of £4.6bn in the first quarter, while Quilter reported a 21 per cent year on year increase to £2.4bn in the final quarter of 2025.
Global markets take a hit
The impact of Altruist’s new tool, dubbed Hazel, was felt across the globe, with both European and US wealth managers seeing their share price drop.
Raymond James reported an 8.7 per cent decline, closing at $158.48 (£116.20), but saw a slight recovery during Wednesday trading, rising 1.2 per cent.
Charles Schwab is yet to recover after falling 7.4 per cent, closing at $99.25, dropping a further 1.1 per cent to $98.13.
Swiss wealth manager Julius Baer dropped 3.1 per cent to 63.72 francs (£60.46), while Deutsche Bank, whose primary listing is on the Frankfurt Stock Exchange, dipped 0.36 per cent to €31.44 (£27.32).
The continent’s largest wealth manager, UBS, also felt the shockwave, dipping 1.7 per cent to 32.92 francs, with its share price plunging 13.8 per cent this year to date.
Financial data and analytics firms also felt the pain, with both S&P Global and MSCI nursing heavy losses on Tuesday.
Anthropic sell-off echoes
The sell-off echoes the sharp fall that swept across software, data and analytic stocks last week, after fears of disruption were caused by Anthropic’s new tool.
The new tool – and the disruption it represents – wiped billions off major European firms, with companies ranging from London’s Experian and Relx to Amsterdam’s Wolters Kluwer reporting a drop.
The reverberations have continued into this week, with FTSE 250 listed Future, which owns popular financial comparison site Go Compare, suffering a 2.9 per cent fall to 430.6 pence.
Rival Money Super Market saw its share price sink by as much as 13 per cent on Tuesday mid morning, falling a further 1.3 per cent on Wednesday to 150.7 pence.
The selloff added comparison sites to the growing list of stocks impacted by the rise of AI tools, with insurance quotes now able to be acquired by tools such as Chat GPT.
Altruist said its new planning tool could assist in creating personalised tax strategies “within minutes” by analysing tax returns, meeting notes and payslips.
The company, which was founded in 2018, said the tool could also explore “what if” scenarios including property sales or retirement transactions.
The tool steps into the market as more investors turn to AI, particularly chat bots, for financial help including portfolio management and budgeting.
Additionally, retail investors are opting for AI over traditional advisers due to high prices, the growing financial literacy gap and the need for convenience, with Altruist promising Hazel will do the work “within minutes”.
Jason Wenk, who founded the company in 2018, said the tool “makes average advice a lot harder to justify”.
Tip of the iceberg?
Susannah Streeter, chief investment strategist at Wealth Club, said: “Fresh casualties from AI advances are falling on the investment landscape.
“This time, wealth management companies have been caught in the crossfire as artificial intelligence services are unleashed.
“The worry is that this is just the tip of the iceberg and fresh efficiencies will be unleashed by AI to disrupt the financial advice and investment industry and reduce the fees which can be charged.
“As the AI cards are shuffled, the pile of potential losers is mounting up, and speculation about which sector will be hit next is rife.”
Dr Lewis Liu, co-founder and chief executive of Twin-1 AI, told City AM the “sell-off is a very blunt reaction”.
He said: “A more nuanced reaction is that firms that rely solely on thin, custom workflows will likely get significantly disrupted by ClaudeCode and others.
“However, firms that have significant distribution, data, embedded infrastructure, or network advantage can use the latest advances in AI to their advantage, assuming they stay innovative.”
Wealth platforms shake it off
However, companies knocked by the AI tool expressed minimal worry in the roll out, stating they already used artificial intelligence on their platforms.
AJ Bell said it sees “AI as an opportunity” to improve efficiency and “enhance the customer and adviser experience”, and uses GenAI across a number of processes, particularly in customer service applications.
Steven Levin, chief executive of Quilter, said “The UK wealth market remains a hugely attractive structural growth opportunity.
We see significant productivity and efficiency opportunity from AI tools, and we have already rolled out AI tools to our advisers.”
Levin added that AI can not replicate “that human relationship” between adviser and client, adding the “vast majority” of revenue and profits were generated from platform administration charges and asset management fees, not from adviser charges.
Aberdeen Group declined to comment.
