For years, Wall Street analysts have written research notes about which industries artificial intelligence would disrupt next. Trucking. Radiology. Customer service. Legal research. Content creation. They sat in glass towers, wrote the notes, and collected their fees. And then on February 10, 2026, a fintech startup called Altruist launched an AI tool that does in three minutes what those same analysts' colleagues in wealth management charge 100 basis points a year to accomplish, and suddenly the disruption wasn't theoretical anymore.
The tool is called Hazel. It ingests tax returns, pay stubs, trust documents, and account statements. It applies tax logic. It generates personalized, optimized tax-saving strategies. The whole process takes under three minutes. Altruist offers it as a flat monthly service for approximately $100. That price point is not a rounding error in wealth management. It is an existential threat, because the primary justification for the industry-standard 1% fee on assets under management has always been that complex tax planning requires expensive human expertise. And now a machine can do it before you finish your morning coffee.
LPL Financial Collapsed 8.3% in Its Worst Session in Years as Investors Fled Wealth Management Stocks
The market reaction was instant and brutal. LPL Financial, the largest independent broker-dealer in the United States, opened lower and kept falling. The stock plunged as much as 11% intraday before closing down 8.3%, one of its worst sessions in recent memory. This is not a speculative micro-cap that swings wildly on rumor. LPL is a major publicly traded financial institution, and its stock got hammered because a startup released a product demo.
Charles Schwab, the brokerage giant that manages trillions in client assets, fell 7.4% on the same day. Morgan Stanley, one of the most prestigious names in global finance, dropped nearly 3% in a single afternoon before stabilizing for a total 5% loss on the week. Raymond James took similar hits. The selling was broad, indiscriminate, and panic-driven.
Combined, the rout erased more than $20 billion in market value across major wealth management firms in a single trading session. Twenty billion dollars vanished because one company showed the market what a $100-a-month AI tool could do.
Why the 1% Fee Model Is Suddenly Looking Like the Taxi Medallion of Financial Services
To understand why Hazel spooked the market so badly, you need to understand the economics of wealth management. The standard fee model in the advisory business is roughly 1% of assets under management per year. If you have $1 million invested with an advisor, you pay approximately $10,000 a year. For that fee, you get portfolio management, financial planning, and critically, tax optimization. Tax-loss harvesting, Roth conversion analysis, charitable giving strategies, estate planning coordination. These services are complex, they require expertise, and they have historically required human judgment.
Hazel threatens to automate the most labor-intensive and highest-value piece of that bundle. If an AI can ingest a client's entire financial picture and generate a tax strategy in three minutes that would take a human advisor hours of billable work, the value proposition of the 1% fee changes overnight. You're no longer paying for expertise. You're paying for a relationship. And while relationships have value, they don't have $10,000-a-year-for-a-$1-million-portfolio value when a machine can do the analytical work for $1,200 a year.
This is exactly what happened to the taxi industry when Uber launched. The medallion system had created artificial scarcity that justified premium pricing. Then a technology company demonstrated that the service could be delivered at a fraction of the cost, and the entire economic model collapsed. Wall Street has spent years using this analogy to describe what AI would do to other industries. Turns out, the analogy works just as well when the disrupted industry is the one writing the research notes.
The "AI-Fear Trade" Spreads Beyond Wealth Management into Tax Prep and Insurance
What made the February 10 selloff particularly alarming was how quickly it spread. The initial reaction was concentrated in pure-play wealth management names like LPL and Raymond James. But within hours, the selling expanded into adjacent sectors. Tax preparation firms saw pressure as investors extrapolated that if AI can do tax planning, tax filing is even more straightforward. Insurance companies with advisory arms took hits. Even some banking stocks softened as the market digested the implications of AI-automated financial services.
This is the contagion pattern that tech disruption follows. It starts in the most obviously affected segment and then radiates outward as investors run the mental math on every adjacent business. If AI can replace a tax planner, can it replace an insurance underwriter? An estate attorney? A mortgage broker? The answer to all of these questions is probably "not yet, but sooner than the incumbents think," and the market was pricing that acceleration in real time.
The Irony of Wall Street's AI Disruption Narrative
For five years, financial analysts at major banks and brokerages published research reports explaining how AI would disrupt every industry from healthcare to logistics. They recommended clients buy AI stocks and sell exposure to "disruption targets." They made this case while sitting inside an industry whose own fee model was built on the assumption that complex financial analysis requires expensive human labor. Hazel didn't just threaten their clients' portfolios. It threatened the story these firms have been telling about themselves.
What Hazel Actually Does and Why It Is More Threatening Than Previous Fintech Disruptions
Altruist's Hazel is not a simple chatbot that answers tax questions. It is an AI-native system that can process disparate financial documents simultaneously, from 1040 forms to complex trust agreements, and synthesize them into a coherent, personalized tax strategy. It applies current tax code logic, identifies optimization opportunities across multiple dimensions (income timing, asset location, loss harvesting, charitable vehicles), and presents the output as an actionable plan.
Previous fintech tools automated pieces of this workflow. Robo-advisors like Betterment and Wealthfront automated portfolio rebalancing. Tax-loss harvesting algorithms automated one specific optimization. But Hazel represents a qualitative leap: it automates the integrative analysis that has always been the human advisor's core competency. Taking a client's complete financial picture, understanding the interactions between different accounts, income sources, and tax situations, and generating a holistic strategy. That was the one thing machines couldn't do. Now one can, and it takes three minutes.
The Human Element That AI Cannot Replace, and Whether It Is Worth 1% a Year
The wealth management industry's response has been predictable. Advisors can't be replaced because clients need behavioral coaching. They need someone to talk them off the ledge during a market panic. They need a trusted human relationship for major life decisions. These arguments are not wrong. The behavioral coaching component of financial advice is genuinely valuable, and there is substantial academic evidence that advisors prevent clients from making costly emotional decisions.
But here's the uncomfortable question: is behavioral coaching worth 1% of assets per year? If the analytical and tax planning work, which currently represents the intellectual backbone of the advisory value proposition, can be done by a $100-a-month AI, what is the remaining human relationship actually worth? $2,000 a year? $3,000? It's certainly not $10,000 on a $1 million portfolio, and it's definitely not $50,000 on a $5 million portfolio.
The fee compression that robo-advisors started a decade ago just accelerated dramatically. Hazel didn't kill the financial advisor. But it put a very precise price tag on the part of the job that can now be automated, and that price tag is about 90% lower than what the industry currently charges.
What February 10 Tells Us About AI Disruption and the Industries That Think They Are Safe
The wealth management rout is a case study in how AI disruption actually arrives. It doesn't come gradually. It comes in a single product launch that crystalizes a threat the market knew was coming but hadn't priced in. Before February 10, everyone in financial services knew that AI would eventually affect their business. After February 10, the word "eventually" was replaced with "now," and $20 billion in market value disappeared in the time between the opening and closing bells.
Every industry that thinks it's safe because "our work is too complex for AI" should be looking at what happened to LPL, Schwab, and Morgan Stanley. Tax planning is complex. It requires understanding interconnected financial systems, applying judgment across multiple domains, and synthesizing information from diverse sources. That is exactly the kind of work that the AI skeptics said would take decades to automate. Altruist did it in a product launch.
Wall Street spent years writing research notes about AI disrupting everyone else. On February 10, 2026, the market delivered a $20 billion memo suggesting they should have been writing about themselves.