Ameriprise Financial Shares Drop Amid Market Turmoil
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 25 2024
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Should l Buy AMP?
Source: Coinmarketcap
Ameriprise Financial Inc shares fell 6% as it hit a 20-day low, reflecting broader market concerns.
The decline follows significant market turmoil triggered by the launch of AI-enabled tax planning features by wealth management startup Altruist, which has raised investor anxiety towards traditional financial firms. This has led to a selloff in financial stocks, including Ameriprise, as investors worry about the impact of disruptive technologies on legacy brokerage operations.
The implications of this market reaction suggest that Ameriprise, along with other financial firms, may need to adapt to the evolving landscape shaped by AI advancements, which could redefine client engagement and service delivery.
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Analyst Views on AMP
Wall Street analysts forecast AMP stock price to rise
8 Analyst Rating
4 Buy
3 Hold
1 Sell
Moderate Buy
Current: 477.790
Low
485.00
Averages
559.71
High
660.00
Current: 477.790
Low
485.00
Averages
559.71
High
660.00
About AMP
Ameriprise Financial, Inc. is a diversified financial services company. The Company’s segments include Advice & Wealth Management, Asset Management, Retirement & Protection Solutions and Corporate & Other. The Advice & Wealth Management segment provides financial planning and advice, as well as full-service brokerage services, primarily to retail clients through the Company’s advisors. The Asset Management segment provides investment management, advice and products to retail, high net worth and institutional clients on a global scale through the Columbia Threadneedle Investments brand. It provides institutional products and services through its institutional sales force. The Retirement & Protection Solutions segment includes retirement solutions (variable annuities and payout annuities) and protection solutions (life and disability income insurance). Retirement Solutions provides variable annuity products by RiverSource Life companies to individual clients.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Introducing Hazel: The AI Tool That Triggered a Stock Market Decline
Market Reaction: Financial advisor Douglas Boneparth noted a significant selloff in wealth management stocks due to concerns over tax planning updates related to Altruist's AI tool.
AI Transformation: Boneparth highlighted that the wealth management industry is undergoing a transformation as AI technology, particularly through Altruist’s Hazel platform, begins to take hold.
See More
Concerns Over AI Impact Financial Stocks, Including Charles Schwab: Reasons to Invest Now.
- AI Fears in Financial Stocks: Concerns regarding artificial intelligence's impact on financial stocks are perceived as exaggerated.
- Market Sentiment: The current market sentiment suggests that the potential threat of AI is not as significant as some investors believe.
- Investment Perspective: Investors may be overreacting to AI developments, which could lead to mispricing in financial stocks.
- Long-term Outlook: The long-term outlook for financial stocks remains positive despite the ongoing discussions about AI.
See More
Financial Services Stocks Sell-Off Due to AI Fears Creates Buying Opportunity
- Overreaction in the Market: Following Altruist's launch of a new AI tax planning tool, LPL Financial's stock dropped over 8%, Charles Schwab fell 7.4%, Raymond James declined nearly 9%, and Ameriprise slumped about 6%, reflecting market fears regarding the sustainability of wealth management fee streams and competitive dynamics.
- Analysts Optimistic for the Future: Morgan Stanley's analyst believes that despite the current sell-off being viewed as an overreaction, wealth management firms are well-positioned to leverage AI for productivity gains, especially with an impending generational wealth transfer expected to increase the number of clients seeking advisory services.
- Potential Opportunities with AI: Deutsche Bank's analyst emphasizes that AI is not a threat but a significant opportunity, noting that Charles Schwab has integrated over 220 AI use cases into its operations, which is expected to accelerate growth by enhancing client experience and enabling personalized outreach.
- Evolution Rather Than Disruption: Citizens JMP's analyst suggests that while the wealth management industry will evolve over the coming decades, there is currently no clear short-term disruption risk, highlighting that the fundamentals of the industry remain strong and the market's reaction may be overly dramatic.
See More
Financial Stocks Decline Amid AI Tool Concerns
- Financial Stock Volatility: Financial stocks experienced significant declines as LPL Financial dropped 8.3%, Charles Schwab fell 7.4%, and Morgan Stanley decreased by 2.4%, indicating investor concerns about AI tools potentially replacing traditional advisory firms.
- Weak Retail Sales: U.S. retail sales for December were flat month-on-month, missing the expected 0.4% increase, which reflects a lack of consumer confidence that could hinder future economic recovery and spending.
- Divergent Market Performance: While the S&P 500 fell by 0.33% and the Nasdaq Composite retreated by 0.59%, the Dow Jones Industrial Average managed a slight gain of 0.1%, suggesting a rotation into sectors that may be more insulated from AI-related pressures, potentially offering new investment opportunities.
- European Company Performance: Siemens Energy reported a 12.8% year-on-year increase in its fiscal first quarter, with net income exceeding expectations, showcasing its competitive strength, while Heineken announced plans to cut 6,000 jobs due to weak beer sales, highlighting challenges in the industry.
See More
Altruist Launches AI Tax Planning Tool for Advisors
- AI Tax Tool Launch: Altruist has unveiled an AI tax planning tool designed for wealth advisors and their clients, aiming to enhance tax management efficiency and optimize investment returns, potentially transforming service models in the wealth management sector.
- Negative Market Reaction: Following this announcement, stocks of Charles Schwab and Raymond James tumbled on Tuesday, reflecting market concerns over the competitive pressure that new technology may impose on traditional wealth management firms.
- Increased Industry Competition: The introduction of AI technology is expected to intensify competition in the wealth management space, compelling traditional advisors to improve service quality to retain client relationships amidst evolving market dynamics.
- Uncertain Future Outlook: While the AI tax tool has the potential to boost efficiency, market sentiment remains cautious regarding its practical application and client acceptance, which may impact Altruist's marketing strategy and future growth prospects.
See More
Reasons the Expanding Stock Rotation Isn't Propelling the S&P 500 Beyond Major Tech Companies
- Market Dependency: The S&P 500 is heavily reliant on megacap tech companies for its performance.
- Need for Support: Significant assistance is required for the equity markets to transition away from this dependency.
- Shift in Focus: There is a nascent shift towards investing in "real economy" stocks.
- Early Stages: The rotation into these stocks is still in its early phases, indicating potential for growth.
See More
Introducing Hazel: The AI Tool That Triggered a Stock Market Decline
Market Reaction: Financial advisor Douglas Boneparth noted a significant selloff in wealth management stocks due to concerns over tax planning updates related to Altruist's AI tool.
AI Transformation: Boneparth highlighted that the wealth management industry is undergoing a transformation as AI technology, particularly through Altruist’s Hazel platform, begins to take hold.
See More
Concerns Over AI Impact Financial Stocks, Including Charles Schwab: Reasons to Invest Now.
- AI Fears in Financial Stocks: Concerns regarding artificial intelligence's impact on financial stocks are perceived as exaggerated.
- Market Sentiment: The current market sentiment suggests that the potential threat of AI is not as significant as some investors believe.
- Investment Perspective: Investors may be overreacting to AI developments, which could lead to mispricing in financial stocks.
- Long-term Outlook: The long-term outlook for financial stocks remains positive despite the ongoing discussions about AI.
See More
Financial Services Stocks Sell-Off Due to AI Fears Creates Buying Opportunity
- Overreaction in the Market: Following Altruist's launch of a new AI tax planning tool, LPL Financial's stock dropped over 8%, Charles Schwab fell 7.4%, Raymond James declined nearly 9%, and Ameriprise slumped about 6%, reflecting market fears regarding the sustainability of wealth management fee streams and competitive dynamics.
- Analysts Optimistic for the Future: Morgan Stanley's analyst believes that despite the current sell-off being viewed as an overreaction, wealth management firms are well-positioned to leverage AI for productivity gains, especially with an impending generational wealth transfer expected to increase the number of clients seeking advisory services.
- Potential Opportunities with AI: Deutsche Bank's analyst emphasizes that AI is not a threat but a significant opportunity, noting that Charles Schwab has integrated over 220 AI use cases into its operations, which is expected to accelerate growth by enhancing client experience and enabling personalized outreach.
- Evolution Rather Than Disruption: Citizens JMP's analyst suggests that while the wealth management industry will evolve over the coming decades, there is currently no clear short-term disruption risk, highlighting that the fundamentals of the industry remain strong and the market's reaction may be overly dramatic.
See More
Financial Stocks Decline Amid AI Tool Concerns
- Financial Stock Volatility: Financial stocks experienced significant declines as LPL Financial dropped 8.3%, Charles Schwab fell 7.4%, and Morgan Stanley decreased by 2.4%, indicating investor concerns about AI tools potentially replacing traditional advisory firms.
- Weak Retail Sales: U.S. retail sales for December were flat month-on-month, missing the expected 0.4% increase, which reflects a lack of consumer confidence that could hinder future economic recovery and spending.
- Divergent Market Performance: While the S&P 500 fell by 0.33% and the Nasdaq Composite retreated by 0.59%, the Dow Jones Industrial Average managed a slight gain of 0.1%, suggesting a rotation into sectors that may be more insulated from AI-related pressures, potentially offering new investment opportunities.
- European Company Performance: Siemens Energy reported a 12.8% year-on-year increase in its fiscal first quarter, with net income exceeding expectations, showcasing its competitive strength, while Heineken announced plans to cut 6,000 jobs due to weak beer sales, highlighting challenges in the industry.
See More
Altruist Launches AI Tax Planning Tool for Advisors
- AI Tax Tool Launch: Altruist has unveiled an AI tax planning tool designed for wealth advisors and their clients, aiming to enhance tax management efficiency and optimize investment returns, potentially transforming service models in the wealth management sector.
- Negative Market Reaction: Following this announcement, stocks of Charles Schwab and Raymond James tumbled on Tuesday, reflecting market concerns over the competitive pressure that new technology may impose on traditional wealth management firms.
- Increased Industry Competition: The introduction of AI technology is expected to intensify competition in the wealth management space, compelling traditional advisors to improve service quality to retain client relationships amidst evolving market dynamics.
- Uncertain Future Outlook: While the AI tax tool has the potential to boost efficiency, market sentiment remains cautious regarding its practical application and client acceptance, which may impact Altruist's marketing strategy and future growth prospects.
See More
Reasons the Expanding Stock Rotation Isn't Propelling the S&P 500 Beyond Major Tech Companies
- Market Dependency: The S&P 500 is heavily reliant on megacap tech companies for its performance.
- Need for Support: Significant assistance is required for the equity markets to transition away from this dependency.
- Shift in Focus: There is a nascent shift towards investing in "real economy" stocks.
- Early Stages: The rotation into these stocks is still in its early phases, indicating potential for growth.
See More
