Shares of LPL Financial Holdings Inc. showed little movement in Wednesday's premarket session, hovering near $360.60, after tumbling 8.3% to $360.58 at Tuesday's close. The sharp decline came as the market digested the potential disruption artificial intelligence could bring to fee-based advisory services like tax planning.
Broader Sector Impact
The selloff was not isolated to LPL. Raymond James Financial Inc. also fell more than 8%, while Charles Schwab Corp. dropped over 7% and Ameriprise Financial Inc. slid 6.2%. The catalyst was Altruist's launch of an AI-enabled tax-planning feature within its Hazel platform for financial advisers.
Altruist founder and CEO Jason Wenk described traditional tax planning as "slow and mentally draining," asserting the new tool can read documents like 1040s and paystubs to generate personalized strategies and run scenarios in minutes. This innovation directly challenges a core revenue stream for human advisers.
Market Reaction and Analyst Views
One market strategist characterized the reaction as a "sell first and ask questions later" mentality, noting that "another sector bites the dust" with each new AI headline. However, some analysts pushed back against the bearish sentiment. Morningstar's Sean Dunlop suggested the "selloff is already overdone," while Citizens analysts emphasized that advisers still provide value through judgment, behavioral coaching, and personalization—elements not easily automated.
The immediate concern for firms like LPL is not a sudden wave of client departures, but that AI tools could make high-touch planning services cheaper to deliver, thereby pressuring fee structures in a business built on recurring revenue.
Investors are now looking ahead to key economic data, including the delayed U.S. January employment report due Wednesday and the Consumer Price Index report on Friday. These releases could influence bond yields and, consequently, how financial stocks are valued in the wake of Tuesday's sector shock.
