A relatively obscure Los Angeles-based startup called Altruist has sent shockwaves through the global wealth management industry with the launch of its AI-powered tool, Hazel.
The announcement, made on Tuesday (10 February), triggered a massive sell-off that erased billions in market value from established giants on both sides of the Atlantic, as investors fretted over the potential for AI to upend traditional financial advice and slash lucrative fees.
Altruist, founded in 2018 and serving around 5,700 independent financial advisors, unveiled Hazel’s new tax-planning feature, which promises to generate fully personalised tax strategies “within minutes” by analysing clients’ tax returns, paystubs, account statements, emails, and more, without any manual data entry.
The tool also enables interactive ‘what-if’ scenarios, such as the tax impacts of selling a home, receiving a bonus, or transitioning into retirement, positioning it as a game-changer for efficiency in an industry long reliant on human expertise.
Market reaction
The market reaction was swift and brutal. In the US, shares of Charles Schwab plunged 7.4% to $99.25, wiping out approximately $13 billion in market value based on its pre-drop capitalisation. Raymond James fell 8.7% to $158.48, while LPL Financial and Stifel Financial each dropped around 8%, contributing to a collective loss exceeding $20 billion across major players.
The panic echoed last week’s sell-off in software stocks following Anthropic’s AI tool launch, highlighting a broader fear that artificial intelligence is poised to commoditise high-margin services like tax and estate planning.
The fallout also hit the UK, where wealth managers endured their own bloodbath on Wednesday. St James’s Place, the FTSE 100-listed firm, cratered 12.7% to 1,265 pence, shedding roughly £900 million in value amid already turbulent times for the company.
AJ Bell dipped 4.8% to 434.6 pence, Quilter fell 5.1%, and Abrdn Group slid 4.5%, with the sector’s woes compounded by concerns over fee compression and AI’s ability to handle complex advice that once justified premium charges.
Market disruption
Some market watchers argue the threat is overstated, pointing to incumbents’ investments in their own AI capabilities.
However, Altruist had made it clear that it aims to be a disruptor in the space.
This isn’t Altruist’s first rodeo in shaking things up – the company, now the third-largest RIA platform, rolled out Hazel’s core AI features last year to automate advisory workflows. But this latest upgrade has investors questioning the future of an industry that’s seen record inflows recently, with St James’s Place reporting £21.8 billion in 2025 – up 19% year-on-year.
“Tax planning is one of the most powerful ways advisors can improve outcomes, but it’s also slow and mentally draining, especially in the busy tax season,” said Jason Wenk, Founder and CEO of Altruist.
“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.”
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