Shares in some of the largest UK wealth management firms fell sharply on Wednesday as concerns about the impact of artificial intelligence (AI) on the sector affected investor and market sentiment.

Stocks in St. James’s Place tumbled by more than 10 per cent in the morning, while other firms such as Rathbones, Quilter and AJ Bell saw falls of around 5 per cent.

Concerns centred around the launch of a new AI-powered tool developed by AI firm Altruist Corp.

The offering aims to support financial advisers with client administration and the creation of bespoke tax strategies.

“Fresh casualties from AI advances are falling on the investment landscape,” commented Wealth Club chief investment strategist, Susannah Streeter.

“This time, wealth management companies have been caught in the crossfire as AI services are unleashed.

“The big reveal from tech start-up Altruist Corp, which is led by former Wall Street professionals, is a new tool helping financial advisers personalise tax strategies for clients and deal with all the admin.”

Streeter said the concern was that the impact of Altruist Corp’s product launch was 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 that 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,” she concluded.

---