This round of AI purge—have wealth management platforms been wrongly targeted?

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As an AI tax planning tool launches in the United States, the fear of "disintermediation" is swiftly spreading, putting pressure on the stock prices of wealth management and trading platforms. However, a new report by BofA Merrill Lynch points out that this wave of selling is an emotional misjudgment, opening up a structural window for investors.

According to Chase Wind Trading Desk, the report states, AI is an enhancement, not a replacement. For high-net-worth clients, trust and professional advice remain irreplaceable cornerstones. The true value of AI lies in assisting advisors to improve efficiency, not overturning service relationships.

From an asset pricing perspective, companies with three major traits are significantly undervalued: First, possessing a solid high-net-worth client base; second, actively embedding AI into business processes; third, having platform advantages and are poised to benefit from the incremental trading volume brought by AI lowering barriers.

The report further points out that the superposition of generational wealth transfer and digital habits is creating long-term structural tailwinds for the industry. The current decline does not signal a fundamental reversal but is the market’s overpricing of the technological shock. The fundamental logic of wealth management platforms remains intact, and wrongly punished industry leaders are experiencing a window for strategic positioning.

Wealth Management Firms: High-Net-Worth Clients Still Need “People”

The market’s overreaction to the AI tax tool is causing the wealth management sector to fall into emotional selling. The logic behind the panic is: investors may turn to AI for financial advice, causing financial advisors to be "disintermediated." BofA Merrill Lynch’s latest view makes it clear that this concern is seriously exaggerated.

First, AI is viewed within the industry as a productivity tool, not a replacement. Leading institutions are actively embedding AI into advisor workflows to improve service efficiency and coverage, actually strengthening rather than weakening the value of human advisors.

Second, the stickiness of high-net-worth customers forms a natural moat. Complex financial planning and generational inheritance needs still rely heavily on the professional judgment and emotional trust provided by human advisors, which AI cannot fully substitute. More importantly, the industry is still experiencing structural tailwinds. Long-term drivers such as the savings gap, generational wealth transfer, and regulatory dividends have not been reversed due to the emergence of AI. The current decline reflects more of an emotional misalignment rather than a turning point in fundamentals.

Spread of AI Panic, Trading Platforms Are Actually Potential Beneficiaries

AI panic has spread from wealth management to trading platforms, causing sector valuations to come under collective pressure. BofA Merrill Lynch believes that there is a fundamental misalignment in this wave of selling logic.

First, the popularization of AI may actually activate trading demand. As the threshold for financial advice lowers, the participation of self-directed investors is expected to increase, structurally benefiting platforms that focus on low fees and no advisory models. Second, the core model of platforms and AI is not a relationship of substitution, but of complementarity. The spread of information lowers user cognitive barriers, which may, in fact, enhance platform stickiness and expand the potential customer pool.

BofA Merrill Lynch reiterates its positive outlook on the wealth management and trading platform sectors in its latest report, emphasizing the significant disconnect between current market panic and fundamentals. The report states that the core logic for being bullish is not to counter AI, but to rely on companies’ own operational improvements and structural growth dividends, with AI serving precisely as a catalyst for increased efficiency and market expansion.

The report believes that the market’s reaction to new technologies typically follows a trajectory of "panic first, clarification later." The valuation adjustment triggered by this wave of AI disruption is essentially an overpricing of the "disintermediation" logic. Data and business models both indicate that AI is lowering service thresholds, activating trading demand, and strengthening high-net-worth client stickiness—its actual impact being contrary to prevailing market narratives.

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The above excellent content is from Chase Wind Trading Desk.

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