There was a selloff in several wealth management-related stocks Tuesday, with shares of Charles Schwab, Raymond James, LPL and Stifel falling between 7-8%. A Bloomberg article attributed the selloff to Altruist’s launch of artificial intelligence-powered tax planning within Hazel, its AI platform, and cited broader concerns about AI disrupting the financial advice space.
Jed Finn, head of wealth management at Morgan Stanley, addressed AI fears, saying that his firm has more than 3,500 individual tools and capabilities, including several for tax planning.
“We don’t write an article every time we release one, obviously,” Finn said, speaking Tuesday at UBS’s 2026 Financial Services Conference. “But the important point in all of it is that an individual tool is a tiny part of the capability ecosystem that is required to help clients achieve their goals. It has to fit as part of the platform. It has to be connected to products. There needs to be relationships with third-party managers to be able to deliver the advice. It has to be wrapped in a way that clients can understand and take action on. And we have been incredibly deliberate about orchestrating that ecosystem over the last several years, which is what has led to our outsized growth.”
Morgan Stanley’s stock fell about 2.4% in trading on Tuesday. However, in its first-quarter earnings released last month, Morgan Stanley reported that total client assets in its wealth and investment management division jumped to $9.3 trillion from $8.9 trillion, mainly due to net new wealth management assets of $122 billion.
Finn stressed that his firm’s business model is based on the “advisor-client relationship.”
“We think that that is going to persist long past new AI interaction tools that get created,” he said. “It’s a very complicated, emotional, personal relationship that clients have with advisors. And even when the technology becomes as good as what anybody can do on their own, and it’s not going to be too long before that happens, clients are still going to want advisors to leverage that technology.”
He likens the AI threat to the “robo hysteria” we saw several years ago. Now, the robo advice business (at about $800 billion) accounts for just three of the wirehouse’s markets.
“This is a scale business. It is going to be very, very difficult, even with the slickest, well-thought-through agents to build the distribution, to build the credibility, to have the experience for doing this in a regulated way, putting the client’s interest first,” he said.
Rather than taking over advisors’ jobs, he said AI will enhance the quality of advice and help advisors scale to serve more clients more effectively.
One example is the firm’s Roth Conversion Analyst, an AI tool that automatically pulls in client data. The advisor can then prompt it with forward-looking assumptions, and it will provide a recommendation on whether the client should convert.
Morgan Stanley is also using an AI agent to automate many routine tasks, so client service associates can focus on higher-value tasks, such as interacting with clients.
“All of these tools in and of themselves are collections of a bunch of smaller bits of functionality, like the one that was talked about in the article,” he said. “But what they are designed to do is make our top teams more efficient because our top teams are doing that work anyway. It’s just a lot of work, and this streamlines it for them.”
A Citizens Bank stock analyst report on Tuesday’s selloff echoed Finn’s remarks, saying that many firms have already been integrating this type of technology “to make advisors more productive, improve client outcomes and streamline back-office and planning functions. This is not a sudden shock to the system; it is part of a long-running evolution.”
The analysts note that the wealth management industry is relationship-driven, with clients valuing trust more than cost efficiency.
“While certain components of advice can be disintermediated or automated by technology, the advisor’s role has always required earning the fee through judgment, behavioral coaching and personalization (and often very personal close relationships).”
They also point out that technology has historically expanded the opportunity set in wealth management, enabling advisors to serve more clients and deliver higher-quality advice at scale.