St. James's Place Leads European Wealth Managers' Tumble on AI Threat — Update

By Joe Stonor

Shares in the U.K.'s St. James's Place fell steeply as wealth management became the latest sector threatened by competition from AI-powered startups.

The FTSE 100 company dropped 13.25% to 12.57 pounds in afternoon European trade on Wednesday, marking its largest percentage decrease since February 2024. The stock is the second-sharpest faller in the Stoxx Europe 600 index.

Investors were responding to the launch of a new AI-powered tax planning tool from U.S. financial-technology firm Altruist on Tuesday. The startup said its tool could analyze tax returns and payslips without manual intervention, helping financial advisors produce "fully personalized tax strategies" in minutes.

Some traders are betting AI innovation could reduce the need for financial advisors, in turn cutting into a key revenue stream for large wealth managers. The pressure on the sector comes after data providers and software companies fell amid investor concerns around AI rivals over the last week.

Other U.K. wealth managers followed St. James's Place lower, with AJ Bell and Quilter dropping 4.7% and 5.2%, respectively. Rathbones Group was down 2.7%.

Elsewhere in Europe, Swiss giant UBS shares dropped 3.1%--extending the stock's difficult start to the year--while private bank Julius Baer fell 4.2%.

Italian wealth managers also fell steeply, led by FinecoBank which dropped 9.3% in afternoon trade. Banca Mediolanum, which has a large wealth management business focused on wealthy Italians, dropped 7.8%. Financial advice network-owner Azimut Holdings fell 5%.

Some analysts see the selloff as overblown.

"People are overreacting," Jefferies analyst Julian Roberts said. While tax planning is a major reason people go to advisers, it is only one part of a bigger, people-focused process, he said.

"The value of people is that they can share experiences with you. It is not possible for AI to empathize."

The stock market reaction to the Altruist launch is the result of traders "looking to replay a narrative that has played out in other industries, rather than representing any 'breakthrough' change in the industry fundamentals," RBC analyst Ben Bathurst said.

St. James's Place manages over 220 billion pounds ($300.17 billion) via a network of nearly 5,000 financial advisors. In half-year results for 2025, published last July, the company said it was exploring the use of AI productivity tools for advisors.

The company argued the new Altruist tool would aid wealth advisors rather than replace them. The group's director of financial advice, Alexandra Loydon, said the AI tool is designed for the U.S. tax system, which is different from the U.K.'s.

"However, we recognize the role AI does and will increasingly play in advising clients. Advisers are using AI now and we are hugely supportive and keen to support developments in this space where tools can complement the role advisers play," Loydon said.

Quilter chief executive Steven Levin said AI tools will not displace the role of human advisors, as the "human relationship, and the trust that underpins it, is not something AI can replicate today."

Moreover, he argued that Quilter's earnings are insulated from threats to advisor charges.

"The vast majority of our revenues and profits are generated from platform administration charges and asset management fees, and not from advisor charges," Levin said.

U.S. financial stocks sold off heavily on the Altruist release Tuesday, with Raymond James falling 8.7%, while Charles Schwab dropped 7.4%. Though Raymond James recovered slightly at the U.S. open, gaining 0.2%, Charles Schwab dropped further, falling 2.3%.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

February 11, 2026 11:21 ET (16:21 GMT)