What Happened?
Shares of independent financial services firm LPL Financial (NASDAQ:LPLA) fell 9.8% in the afternoon session after fears of industry disruption grew as wealth management startup Altruist introduced AI-enabled tax planning features, sparking a selloff in U.S. brokerage stocks.
The move reflected growing investor anxiety that AI-first startups could automate complex tasks that were long the exclusive domain of human advisors. This development fueled concerns about the future for incumbent firms in the financial and tech sectors. The introduction of these AI tools by a newer competitor led to a broader decline among established brokerage firms as the market reacted to the potential for technological disruption.
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What Is The Market Telling Us
LPL Financial’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 10.2% on the news that the company reported third-quarter results that surpassed analyst expectations on several key metrics.
The wealth management firm posted adjusted earnings of $5.20 per share, a 25% increase from the prior year and well ahead of the $4.49 consensus estimate. Revenue also impressed, growing 48.4% year-over-year to $4.55 billion, beating forecasts. While the company reported a small pre-tax loss on a GAAP basis, investors appeared to focus on the strong underlying business momentum. This was highlighted by its assets under management (AUM), which surged 48.9% year-over-year to $2.3 trillion, also easily clearing Wall Street's expectations. The strong performance in adjusted earnings, revenue, and asset growth fueled investor optimism.
LPL Financial is down 1.1% since the beginning of the year, and at $357.54 per share, it is trading 10.4% below its 52-week high of $399 from July 2025. Investors who bought $1,000 worth of LPL Financial’s shares 5 years ago would now be looking at an investment worth $2,778.
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