UK Wealth Management Stocks Plummet Amid AI Disruption Concerns

Impact of AI on Wealth Management Stocks

MILAN, Feb 11 - UK wealth management stocks St James’s Place and Quilter fell sharply on Wednesday, as concerns over potential disruption from artificial intelligence spread to the broader European financial sector, following a steep selloff in U.S. rival stocks.

Market Reaction to AI Developments

A gauge of European financial services shares fell as much as 1.8% by 0923 GMT, with St James’s Place down more than 10% at one point and Quilter sliding as much as 6.1%, both hitting their lowest levels since December.

Short-term Positioning vs. Fundamentals

Shares in LSEG, already hit by a selloff last week that wiped out nearly $1 trillion in value from across the global software sector, rose 2% after activist investor Elliott was reported to have built a stake and begun engaging with the company to drive performance.

Broader Implications for European Financials

Shares of U.S. brokerages sold off on Tuesday after wealth management startup Altruist introduced AI‑enabled tax‑planning features, as the still-nascent technology continues to fuel fears over disruption to incumbents.

Analysts at RBC Capital Markets said the reaction in UK wealth manager stocks appeared driven more by short‑term positioning than any fundamental shift, noting the selloff mirrored larger declines in U.S. wealth shares.

“If shares do continue to display volatility in response to subsequent developments, we expect this to reignite the man vs machine debate in delivery of financial advice/WM,” they wrote in a note.

Elsewhere across European financials, Italian asset managers were also heavily hit, with Banca Mediolanum and Azimut down 5.6% and 3.8%, respectively. Other big decliners on Wednesday included online trading platforms FlatexDEGIRO and Swissquote.

(Reporting by Danilo Masoni; Editing by Amanda Cooper)