European asset managers tumble as AI disruption jitters spread

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By Danilo Masoni, Iain Withers and Lucy Raitano Shares of European money managers fell sharply on Wednesday following a steep selloff in U.S. rivals a day earlier, as they became the latest firms swept up in investor concerns that artificial intelligence will upend established businesses.Investors have become increasingly anxious that AI-first startups will be able to automate complex tasks currently carried out by humans and undermine existing business models.Shares in some of Europe's biggest asset managers, including Amundi EURONEXT:AMUN, DWS Group XETR:DWS and Schroders LSE:SDR fell as much as 2% to 4% earlier in the day and were last down 1% to 2% on the day. The biggest declines were seen at wealth managers, with Britain's St James's Place LSE:STJ dropping 12.2%, while Quilter LSE:QLT shed 4.4% and Rathbones LSE:RAT fell 2.7%.The downturn in Europe came after shares in U.S. brokerages tumbled on Tuesday, with analysts attributing the moves to wealth management startup Altruist's introduction of AI-enabled tax planning.U.S. asset manager stocks were fairly stable in pre-market trading on Wednesday."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 also suffered a sharp selloff earlier this month on similar investor concerns about the impact of new AI products.SOME SERVICE PROVIDERS AT RISK FROM LARGE LANGUAGE MODELS An index of European financial services shares (.SXFP) was last down 1.6%.Italian asset managers' shares were also heavily hit, with Banca Mediolanum MIL:BMED and Azimut MIL:AZM down 6% and 4%, respectively. Other big decliners on Wednesday included Banca Generali MIL:BGN which shed 7%, FinecoBank MIL:FBK dropped 8%, as well as online trading platform Swissquote which fell 5% SIX:SQN.Gerry Fowler, head of European equity strategy and global derivatives strategy at UBS, said that users of new AI technologies look set to benefit from productivity gains. But providers of services capable of being replaced by large language models could be in "real trouble"."Basically, the advice part of any market is going to be more easil...

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