Shares in wealth managers and investment platforms, including St James's Place PLC, AJ Bell PLC, Quilter PLC, Rathbones Group PLC, fell sharply on investor worries about the impact of new AI tools.
The decline mirrored a sell-off of US wealth managers overnight, stemming from the launch of a new tax planning tool from Altruist felt to be the source of the fear.
Los Angeles-based Altruist, a wealth platform startup for independent financial advisors, yesterday launched a new tax planning offering within its Hazel AI platform, boasting that it "helps advisors create fully personalized tax strategies for clients" by reading and interpreting their tax returns, payslips, account statements, emails and other data "within minutes".
The startup said Hazel’s AI-powered tax planning is available to any firm and the new tools represent "the first installment in a series of expanded planning solutions anticipated for the platform".
US wealth managers such as LPL Financial, Charles Schwab, Raymond James and Ameriprise Financial sank between 7% and 9%.
St James's Place shares fell 11.25%, AJ Bell was down 5.85%, Quilter 5.3%, Rathbone's and IntegraFin Holdings PLC over 4%, while Interactive Investor owner and fund manager Aberdeen Group PLC was down 3.7%.
Hedge fund manager Man Group PLC was down 2.8%, online brokers CMC Markets PLC and IG Group Holdings Plc fell around 2.7%, Schroders PLC and Jupiter Fund Management PLC lost either side 2.5%.
It followed falls for the software and media sectors last week after AI company Anthropic released a new 'agentic' tool for corporate legal teams.
Market analyst Susannah Streeter 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."
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."