Investors have been grappling with fresh uncertainty as what first appeared to be a technology-focused correction has widened into a broader wave of concern. The anxiety is no longer confined to software and AI infrastructure companies; traditional financial services firms have also come under pressure amid fears that artificial intelligence could disrupt long-standing business models.
On February 10, US brokerage and wealth management stocks tumbled after Altruist Corp. introduced an AI-driven tax planning tool designed to automate tasks that advisers have historically handled for substantial fees. The development rattled markets, with shares of major players such as Charles Schwab, Raymond James, and LPL Financial falling sharply as investors worried about the potential erosion of advisory revenues. Even firms like Stifel Financial and Morgan Stanley were dragged lower, making financial services one of the weakest-performing segments that day.
This market reaction reflects a wider unease about AI’s capacity to reshape industries once considered relatively insulated from automation. Earlier in the month, software and data services companies experienced steep declines, collectively losing around $1 trillion in market value as investors reassessed the durability of competitive advantages in AI’s wake.
For retail investors in India, such developments can evoke memories of past bouts of market turbulence. The concern now extends beyond AI’s role in coding or customer support to the possibility that automation might encroach on advisory functions, compress fees, and unsettle institutions many rely on for financial guidance.
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Industry voices in India, however, offer a notably different perspective. Trivesh D, COO at Tradejini, argues that global reactions often blur the distinction between fear of change and actual disruption. In India, he suggests, adoption of AI-led financial tools will hinge on reliability, accuracy, and suitability for investors’ individual goals rather than alarmist narratives.
He points out that AI is already proving valuable in areas such as aggregating fragmented financial data—bringing together demat accounts, bank records, tax details, and insurance information into cohesive dashboards that enable clearer portfolio insights. In this view, AI functions more as an efficiency enhancer than a replacement for human advisers.
Trivesh also anticipates a gradual evolution within the advisory space. Automated platforms may increasingly handle routine planning for a wider client base, while human experts concentrate on complex matters requiring nuanced judgement, such as estate structuring or cross-border taxation. Regulatory oversight from bodies like Sebi and the RBI, he adds, will likely ensure transparency and safeguard investor interests as AI usage expands.
Pranay Aggarwal, Director and CEO of Stoxkart, echoes this measured outlook. He emphasises that India’s regulatory environment prioritises accountability and human supervision, making it unlikely that AI tools would displace professional responsibility. While AI can streamline analysis, compliance, and research, final decision-making authority remains with regulated institutions.
Aggarwal further notes that Indian investors often value personal relationships and reassurance, especially during volatile periods. Though AI excels at processing data and identifying patterns, it cannot replicate the trust and emotional intelligence central to financial advisory relationships.
Beyond the noise
Taken together, these views suggest that the turbulence seen in US markets does not necessarily foreshadow a comparable upheaval in India. Rather than reacting with alarm, India’s financial sector appears inclined toward cautious, phased integration of AI technologies.
For Indian retail investors, the broader lesson may be that global markets can experience sharp sentiment-driven swings, but India’s financial ecosystem is structured to incorporate innovation steadily, with regulation and human oversight serving as stabilising anchors. AI is poised to reshape processes and expand access, yet there is little indication that it will undermine confidence or fundamentally destabilise the sector.
