The wealth management technology provider Altruist announced Tuesday the introduction of new tax planning features within its artificial intelligence-powered Hazel platform, with the news apparently sparking a selloff in wealth management stocks.
The new capability helps advisors create personalized tax strategies for clients by reading and interpreting their 1040s, paystubs, account statements, meeting notes, emails, and custodial and CRM data. The platform then applies "deep tax logic" to the analysis, according to the firm's announcement, all of which is done within minutes.
"Tax planning is one of the most powerful ways advisors can improve outcomes, but it's also slow and mentally draining, especially in the busy tax season," said Jason Wenk, founder and CEO of Altruist, in a statement. "Hazel's tax planning feature flips that dynamic. It expands what a single advisor can handle, raises the bar on outcomes, and makes average advice a lot harder to justify."
Hazel also delivers interactive scenario modeling, allowing advisors to explore "what-if" questions, such as the impact of a bonus, home sale, retirement transition, or family lifestyle changes, and see projected tax outcomes updated in real time.
Like all Hazel features, the announcement suggests, tax planning is governed by zero data retention agreements with Hazel's AI model providers, meaning they are prohibited from retaining any data from Altruist or its customers. Likewise, client data is not used to train AI models, and Hazel operates on the same secure infrastructure as Altruist.
This new capability represents the first installment in a series of expanded planning solutions anticipated for the platform, the announcement notes.
In apparent reaction to the news, investors moved to unload shares of Charles Schwab Corp., Raymond James Financial Inc., LPL Financial Holdings Inc. and Stifel Financial Corp. All fell between 7% and 8%.
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