Shares of Charles Schwab Corp. experienced a sharp decline in after-hours trading on Tuesday, February 10, 2026, falling approximately 7.5% to $99.25. The stock had dipped as low as $97.03 during the session, representing a drop of roughly $8 from its previous closing price. This sell-off was part of a broader downturn affecting major brokerage and wealth management firms, triggered by the launch of new artificial intelligence-driven tax planning tools by the fintech company Altruist.
Market-Wide Pressure on Brokerage Stocks
The introduction of Altruist's Hazel AI platform, which can analyze tax documents like Form 1040s and pay stubs to generate personalized tax strategies within minutes, sparked investor concerns about automation encroaching on traditional financial advisory roles. This sentiment weighed heavily on the sector. LPL Financial shares dropped about 8.2%, Raymond James declined 8.8%, and Morgan Stanley fell 2.5%. The Financial Select Sector SPDR ETF (XLF) also retreated, closing down roughly 0.8%.
Market analysts noted the potential disruptive force of such technology. Dennis Dick, Chief Market Strategist at Stock Trader Network, commented that the tool "looks like it could potentially disrupt some of the retail brokerages," highlighting the anxiety driving the day's trading action.
Details of the New AI Tool
Altruist's Hazel platform now features a tax planning module designed to streamline what founder and CEO Jason Wenk described as a "slow and mentally draining" process during tax season. The company asserts the tool "raises the bar on outcomes" by providing interactive "what-if" modeling capabilities. Gokul Ramanathan, Hazel's product manager, explained that advisors can quickly turn client documents into a presentation-ready plan following a consultation.
The tool is being offered at $60 per seat monthly and is available not only to firms that custody assets with Altruist but also sold separately to other advisory practices. Altruist emphasized its commitment to data privacy, stating it follows zero-data-retention policies and does not use customer data to train its AI models.
Context for Charles Schwab's Business
Charles Schwab operates a significant retail brokerage and banking operation. Its advisor-services division provides custody and trading support for independent registered investment advisers (RIAs). In this capacity, Schwab acts as the back-end custodian, holding client assets and processing trades, while the independent adviser maintains the primary client relationship. This business model makes the company particularly sensitive to competitive innovations in advisor technology tools.
Ironically, the sell-off followed a positive business update from Schwab just one day prior. The company reported that its Schwab Trading Activity Index rose to 49.96 in January, up from 48.48 in December. Joe Mazzola, Schwab's head of trading and derivatives strategy, noted that "Schwab clients returned as net buyers of stocks in January," indicating a pickup in retail investor engagement.
Broader Market Conditions and Future Catalysts
The broader U.S. equity market ended Tuesday's session mixed, with the S&P 500 index declining 0.33%. Investors were digesting flat retail sales data and anticipating the delayed nonfarm payrolls report scheduled for release on Wednesday.
Industry observers caution that initial market reactions to technological announcements are not always definitive. Major established brokers like Schwab possess the resources to develop or acquire similar capabilities rapidly. Furthermore, stringent financial compliance regulations act as a natural brake on how much AI can autonomously handle real client data, often necessitating a human professional to review and approve any AI-generated plan.
Investors are now turning their attention to Schwab's scheduled January monthly activity report, which is set for release before the market opens on Thursday, February 13. This report will provide the next significant data point for assessing the firm's underlying business health following the AI-induced market volatility.
