UK wealth management equities slipped in Wednesday morning trade after weakness in U.S. wealth names spilled into European markets and an AI-driven tax-planning feature drew attention within the adviser community.
The AI development in question was announced on Tuesday when Altruist added a tax-planning tool to its Hazel platform. The company said the feature enables advisers to "create fully personalised tax-planning strategies for clients… within minutes."
Market moves were most pronounced in London. As of 10:20 GMT on Wednesday, several UK wealth managers were trading notably lower. St. James's Place PLC (LON:SJP) led the declines with an 11.7% fall. AJ Bell PLC (LON:AJBA) was down 6.2%, Quilter PLC (LON:QLT) dropped more than 5%, Rathbones Group (LON:RAT) lost over 4%, IntegraFin declined 4.3% and Schroders slipped 2.3%.
Those moves followed sharp falls in U.S. wealth firms the previous day. Raymond James Financial and Charles Schwab both closed lower on Tuesday, down 9% and 7% respectively.
Analyst perspective
Analysts at RBC Capital Markets characterised the sell-off as primarily driven by short-term market positioning that is trying to replay narratives seen in other sectors, rather than reflecting an immediate, fundamental change to the wealth management business model.
RBC identified several durable advantages that continue to support face-to-face financial advice in the UK and that, in the analysts' view, should protect the channel "for at least a generation." Those points include the holistic nature of financial advice - which spans planning, investment oversight, relationship management and an understanding of clients' broader personal circumstances - and the importance of advisers in persuading clients who are averse to market risk.
The analysts also emphasised the role of emotional intelligence in helping clients navigate major life events, an area they said artificial intelligence cannot replicate. Regulatory factors were cited as another defensive element: financial advice is a regulated activity that requires authorisation and carries potential liability for advice risk.
AI as a potential productivity lever
While highlighting these protective factors, RBC did not dismiss potential upside from AI. The analysts noted that AI tools could enhance adviser productivity by reducing time spent servicing each client. That efficiency could allow advisers to concentrate on higher-value customers or extend services profitably to lower-value clients who might currently be uneconomic to serve.
RBC singled out Quilter, Rathbones and St. James's Place as UK firms with the scale and resources to invest in AI capabilities. The analysts expect that financial reporting for the 2025 financial year will provide greater clarity on how these and other firms plan to allocate resources toward AI initiatives.
Overall, the market reaction described reflects an immediate re-pricing influenced by cross-border sector moves and technological developments rather than a declared structural shift in the UK advice market.