UK wealth management stocks fell sharply Wednesday, with St. James’s Place leading declines at an 11.7% drop. The sell-off followed U.S. peers like Raymond James Financial falling 9% after Altruist launched an AI-driven tax planning tool, sparking concerns about automation displacing human advisers.

RBC Capital Markets analysts called the reaction overblown, arguing personalized financial advice remains protected by regulatory barriers and the emotional intelligence required for complex client relationships. They noted Quilter, Rathbones, and St. James’s Place have resources to adopt AI as a productivity tool rather than face displacement.

The sector faces dual pressures: investors pricing in AI disruption risks, while firms explore using automation to serve cost-sensitive clients. RBC estimates UK advisers spend 60% of time on administrative tasks AI could streamline, potentially expanding market reach without replacing high-touch services.

Wednesday’s declines marked the sharpest single-day drop for UK wealth managers since 2023, though stocks regained some ground by afternoon trading as analysts emphasized sector fundamentals.