Investors have become increasingly anxious that AI-first startups can automate complex tasks currently done by humans and undermine existing business models
International News via Reuters:
Shares of European money managers fell sharply on Wednesday following a steep selloff in U.S. rivals, the latest firms to be swept up in investor concerns that artificial intelligence will upend established businesses.
Investors have become increasingly anxious that AI-first startups can automate complex tasks currently done by humans and undermine existing business models.
Shares in some of Europe’s biggest asset managers, including Amundi, DWS Group and Schroders were all down around 2-3% on the day. The biggest falls were seen at wealth managers, with Britain’s St James’s Place dropping 11%, while Quilter shed 5% and Rathbones fell 4%.
The falls in Europe came after shares in U.S. brokerages tumbled on Tuesday, with analysts attributing the moves to wealth management startup Altruist introducing AI-enabled tax planning.
“We expect this to reignite the man vs machine debate in delivery of financial advice,” analysts at RBC said in a note.
The RBC analysts added they felt the selloff in UK wealth managers overlooked the value wealth advisers could bring, noting that the Altruist product appeared to be aimed at helping financial advisers rather than replacing them.
Software companies’ shares globally also suffered a sharp selloff earlier this month on similar investor concerns about the impact of new AI products.
A gauge of European financial services shares was last down 1.6%.
Italian asset managers’ shares were also heavily hit, with Banca Mediolanum and Azimut down 6% and 4%, respectively. Other big decliners on Wednesday included Generali which shed 7%, FinecoBank dropped 8%, as well as online trading platform Swissquote which fell 5%.
Reporting by Danilo Masoni in Milan and Iain Withers in London, additional reporting by Romolo Tosiani, Giancarlo Navach, Enrico Sciacovelli; Editing by Amanda Cooper and Emelia Sithole-Matarise
