UK Wealth Managers Endure Sharp Share Price Decline Amid AI Tool Concerns
Shares in several of Britain's largest wealth management companies experienced significant declines on Wednesday as investor anxiety grew regarding competitive threats from a newly launched artificial intelligence investment tool. The market reaction highlights growing fears about how rapid technological advancements could disrupt traditional financial advisory services.
Major UK Firms Hit Hard by Market Reaction
St James's Place, the UK's biggest wealth management group, suffered the most severe blow with its share price dropping 12.7 percent to 1,265 pence. This sharp decline followed the announcement from US-based wealth management platform Altruist about their new AI tool designed to help financial advisers create personalised investment strategies for clients.
The development from the Los Angeles-headquartered company triggered widespread investor concern about how artificial intelligence might undermine traditional aspects of the wealth management industry. St James's Place was not alone in experiencing market pressure, as multiple UK wealth managers saw their share values decrease substantially.
AJ Bell's share price slumped 4.8 percent to 434.6 pence, down from its previous close of 455.8 pence. Wealth manager Quilter dropped 5.1 percent, while Aberdeen Group reported a 4.5 percent decline and Schroders slipped 2.3 percent. This represents a significant setback for UK wealth managers who have enjoyed strong inflows in recent months.
Strong Performance Prior to AI Announcement
Ironically, the share price declines come despite strong recent performance from these companies. St James's Place had reported a 19 percent year-on-year increase in its latest results, with inflows reaching £21.8 billion as the company sought to move past a turbulent 2024 period.
Elsewhere in the sector, AJ Bell recorded inflows of £4.6 billion during the first quarter, while Quilter reported a 21 percent year-on-year increase to £2.4 billion in the final quarter of 2025. These positive results highlight how investor concerns about AI disruption have overshadowed otherwise strong financial performance.
Global Market Impact Extends Beyond UK
The impact of Altruist's new tool, named Hazel, reverberated across global financial markets, affecting both European and American wealth management firms. Raymond James reported an 8.7 percent decline, closing at $158.48, though it experienced a slight recovery during Wednesday trading with a 1.2 percent increase.
Charles Schwab has yet to recover after falling 7.4 percent and closing at $99.25, then dropping a further 1.1 percent to $98.13. Swiss wealth manager Julius Baer dropped 3.1 percent to 63.72 francs, while Deutsche Bank dipped 0.36 percent to €31.44.
UBS, the continent's largest wealth manager, also felt the shockwave with a 1.7 percent decline to 32.92 francs. The company's share price has plunged 13.8 percent year-to-date, indicating broader challenges in the sector beyond the immediate AI concerns.
Financial Data Firms Also Affected
The market reaction extended beyond wealth managers to include financial data and analytics companies. Both S&P Global and MSCI reported heavy losses on Tuesday, suggesting that investor concerns about AI disruption are spreading across multiple financial service sectors.
This sell-off echoes similar patterns observed last week when fears about technological disruption caused sharp declines across software, data, and analytic stocks following the announcement of Anthropic's new tool. That development wiped billions off major European firms including London's Experian and Relx, along with Amsterdam's Wolters Kluwer.
Comparison Sites Join Growing List of Affected Companies
The reverberations have continued into this week, with FTSE 250 listed Future, which owns popular financial comparison site Go Compare, suffering a 2.9 percent fall to 430.6 pence. Rival Money Super Market saw its share price sink by as much as 13 percent on Tuesday mid-morning, falling a further 1.3 percent on Wednesday to 150.7 pence.
This development adds comparison sites to the growing list of stocks impacted by the rise of AI tools, particularly as insurance quotes can now be acquired through platforms like ChatGPT. The expansion of AI capabilities into financial services continues to create uncertainty across multiple market segments.
Altruist's Hazel Tool Promises Rapid Personalisation
Altruist stated that its new planning tool could assist in creating personalised tax strategies "within minutes" by analysing tax returns, meeting notes, and payslips. The company, founded in 2018, explained that the tool could also explore "what if" scenarios including property sales or retirement transactions.
The tool enters the market as more investors turn to AI, particularly chatbots, for financial assistance including portfolio management and budgeting. Retail investors are increasingly opting for AI over traditional advisers due to high prices, the growing financial literacy gap, and the need for convenience.
Jason Wenk, who founded Altruist in 2018, commented that the tool "makes average advice a lot harder to justify," highlighting how AI could raise standards across the financial advisory industry.
Industry Experts Express Concern About Broader Impact
Susannah Streeter, chief investment strategist at Wealth Club, observed: "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."
She added: "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, offered a more nuanced perspective, telling City AM that the "sell-off is a very blunt reaction." He explained: "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 Express Confidence in Adaptation
Despite the market reaction, companies affected by the AI tool announcement expressed minimal concern about the rollout, noting they already incorporate artificial intelligence within their platforms. AJ Bell stated it sees "AI as an opportunity" to improve efficiency and "enhance the customer and adviser experience," using generative AI across multiple processes, particularly in customer service applications.
Steven Levin, chief executive of Quilter, commented: "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 cannot replicate "that human relationship" between adviser and client, noting that 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 on the market developments.
