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Chapter 1: How is AI impacting the stock market and financial brokerages?
AI sends another tremor through stocks. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. AI has been coming for one industry after another recently. Last week, new AI tools threatened to make software firms obsolete. Their shares sank. Then it was insurance brokers. Same story. The latest example is in finance.
specifically brokerages that help people invest and do financial planning, a new AI tool from a startup called Altruist promises to automate tax planning. Shares of Charles Schwab, Raymond James, Ameriprise are all down 5 to 10 percent in the past five days. Marketplace's Nova Sappho has more.
The new AI application from Altruist is set to ingest documents like tax forms, pay stubs and notes and spit out tax planning advice, traditionally a function of a financial advisor. The AI is reducing the cost of intelligence. Thomas Schuster is research director at IDC Financial Insights.
When intelligence gets cheaper, you know, the margins shift within the ecosystem. And so it is, by definition, I think, you know, highly disruptive.
So, which companies might get walloped? Sean Dunlop at Morningstar says it's hard to say.
Investors have been looking to see what firms they think might be exposed to AI disruption, and that has been pretty wide-ranging.
But it's not clear firms are facing a serious threat at all, in part because we've seen this movie before. Financial advisors have offered automated options for at least a decade, but clients haven't used them much, says Dunlop.
You're looking at somewhere between 2% and 4% penetration of robo-advice solutions. I don't think that's a bad analog as we look forward at what the impact of AI is going to be.
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Chapter 2: What new AI tools are threatening traditional financial advisory roles?
Such low uptake is no surprise to Isabella Loaiza of MIT, who's researched AI's impact on the financial industry.
In financial services, you need a lot of human capabilities like opinion, empathy, hope,
Good luck getting those from AI. Loaiza expects AI to augment the work of financial advisors, not replace them. I'm Novosafo for Marketplace.
President Trump is considering canceling the USMCA trade deal that he brokered in his first term to replace NAFTA. This is according to Bloomberg. He's also opposed to opening an almost finished bridge connecting Canada and Detroit. Yesterday, the House pushed back, at least symbolically, passing a resolution that would limit President Trump's ability to place tariffs on Canada.
It is not likely to survive a veto. Canada, meanwhile, has tried to pivot and expand its trade relationship with China. So are the EU and the UK, who are also looking to India and South America. For more, we've got Chad Bowne, senior fellow at the Peterson Institute for International Economics. Good morning. Good morning. Hi, Sabri.
So, you know, we have seen this very clear pivot to China from some U.S. allies, high-profile visits by Canadian Prime Minister Mark Carney, British PM Keir Starmer. Is this pivot translating into something economically real, or is it more symbolic?
I think there definitely is symbolism. I wouldn't say it's economically huge, especially on the Canadian side. It's an agreement by the Canadians to buy more of what the Chinese are really good at making right now, which is electric vehicles, that the United States has essentially said, we're not going to buy any of those. So it is something that's actually quite symbolically important.
If Canada does allow a bunch of Chinese electric vehicles in, does that mean anything for the U.S. or U.S.-based electric vehicle makers?
By itself, this is only 49,000 electric vehicles, so this is not a huge number. But the North American automobile industry is hugely integrated. So if this were part of a broader sign— that Canada is saying, you know, we need to be more aligned with countries outside of North America, then that could have potentially really big implications for American-based auto production.
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