Billions have been wiped off British stockbrokers over fears artificial intelligence will put financial advisers out of business, triggering a sharp sell-off in the sector. Investor concerns are focused on the potential for automated advice platforms and artificial intelligence driven tools to replace or significantly reduce the role of human brokers and wealth managers in serving clients.
The slide in share prices reflects a broader anxiety that technology could rapidly erode the margins and business models of firms that depend on fees for personalised investment advice. Market participants are reassessing the long term prospects of traditional advisory services as artificial intelligence systems become more capable of handling portfolio construction, risk profiling and ongoing investment recommendations at lower cost.
Wealth management groups and stockbroking firms are now under pressure to demonstrate how they can adapt their services to incorporate artificial intelligence rather than be displaced by it. The sector faces difficult strategic choices over investment in new technology, restructuring of advisory teams and potential consolidation as companies look for scale to compete in a market where digital and automated solutions are gaining traction with investors.
