LPL Financial’s stock took a brutal hit on February 10, 2026, plunging as much as 11% in a single afternoon after a competitor launched an AI-powered tax-planning tool that sent shockwaves through the wealth management industry. The decline erased nearly six months of steady gains in just hours, catching investors off guard and raising serious questions about the future of human financial advisors. Modern AI systems often outperform traditional methods by finding hidden patterns in large datasets, which has analysts worried about cost-effective automation disrupting advisory fees predictive accuracy.
The catalyst wasn’t a disappointing earnings report or new regulations. Instead, Altruist Corp’s sophisticated AI tool triggered what industry watchers called a “Sputnik moment” for wealth management. Investors suddenly worried that artificial intelligence could replace high-value human advisory services, threatening the fee-based business model that makes firms like LPL profitable. This “displacement anxiety” shifted the market narrative from growth opportunities to existential risks.
The timing made the selloff particularly painful because LPL had just reported impressive fourth-quarter results. Adjusted earnings per share hit $5.23, beating analyst expectations of $4.94. Revenue jumped 40% year-over-year to $4.93 billion, while total assets under management grew 36% to $2.4 trillion. Net income rose 11% to $301 million. By any traditional measure, LPL was crushing it.
But investors focused on future challenges instead of past victories. The company’s 2026 expense guidance projected Core G&A costs of $2.16 to $2.21 billion, up sharply from $1.85 billion in 2025. This significant increase raised concerns about margin pressure ahead, suggesting that strong revenue growth might not translate into equally strong profits. The company declared a quarterly dividend of $0.30 per share, payable March 24, 2026.
LPL’s valuation added another layer of vulnerability. The stock traded at 33.8 times earnings, well above the industry average of 19.9 times. With such elevated expectations already baked into the price, investors had little patience for bad news or uncertainty. The combination of AI disruption fears, rising costs, and rich valuation created a perfect storm.
The stock closed down 6.3% at $368.62, with technical indicators flashing warning signs. Trading roughly 8% below its 52-week high, LPL now faces the challenge of proving that human advisors can still justify their fees in an AI-powered world. The selloff continued the following day, with shares falling an additional 6.08% to $338.67 on February 11 amid heightened volatility.
