Shares of financial services firms tanked Tuesday after the launch of a new tax planning tool powered by artificial intelligence that promises to do the work "within minutes."
LPL Financial closed 8.31% lower after tumbling 11% in midday trading, while Charles Schwab fell 7.42% and Raymond James Financial lost 8.75% amid fears that AI will disrupt their industry next. Morgan Stanley dropped 2.4%.
Tech platform Altruist announced the offering within its AI platform, Hazel, and said it "helps advisors create fully personalized tax strategies for clients by reading and interpreting their 1040s, paystubs, account statements, meeting notes, emails, and custodial and CRM data, and applying deep tax logic to the analysis."
It appears investors are worried about AI replacing some of the profitable offerings of established financial advisor firms, or at the very least, eating away at their margins.
We saw this earlier this year with the software stocks after Anthropic's latest AI model appeared able to be allow businesses to do legal work and build programs for which they would otherwise pay an expensive license.
The iShares Expanded Tech-Software ETF (IGV) is down by 19% this year as shares of companies like ServiceNow and LegalZoom cratered.
The iShares U.S. Broker-Dealers and Securities ETF was off by 3.13% on Tuesday.
