Meta’s new Muse AI agent is weighing on financial stocks as investors fear the bot could be powerful enough to transform the industry – providing serious competition to human advisors.
Leading financial firms Charles Schwab, LPL Financial, Raymond James and Ameriprise Financial fell 0.8%, 1.4%, 0.9% and 1.9%, respectively, by 3:50 p.m. ET Wednesday — as Muse continued to draw plaudits for the array of tasks it can perform since it was released earlier this month.
Wall Street banks JPMorgan, Bank of America and Goldman Sachs slumped 0.8%, 0.4% and 2.2%, respectively, also extending declines from the previous day. JPMorgan and Bank of America are each down about 4% so far this week.
Mark White, wealth advisor at Mark White Wealth Advisors, told The Post that investors fear Muse could grow so popular, it could force the financial industry to revamp its entire business model.
“Investors are worried that AI assistants could become the first place consumers go for financial information and routine transactions,” he said.
“If that happens, banks and other financial firms may have to spend more to reach customers, compete harder on fees and rethink how they deliver service.”
Downloads of Meta’s latest AI agent have already soared past rivals like OpenAI’s ChatGPT, Anthropic’s Claude and SpaceXAI’s Grok. Muse was downloaded nearly 1 million times in the six days after its Sept. 8 launch, according to an expert cited by Bloomberg News, and was the top free app in the US on Apple’s AppStore and Google Play as of Monday.
The new bot was designed to feel conversational and automatically complete everyday tasks, like cleaning out email inboxes, filling out electronic forms, making purchases online – and even managing personal finances.
“The wild fear is that if an AI bot can constantly shop for better rates or move customers to another deal in seconds, customer loyalty becomes a faded memory,” Scott Martin, partner at Kingsview Wealth Management, told The Post.
If Muse can manage users’ savings more efficiently than advising firms, then fewer customers could feel the need to hire the old pros – and there would be less cash sitting around for brokerages to turn into profits.
The app’s explosive popularity triggered a sell-off of wealth-management firms, brokerages and top Wall Street banks that started Tuesday and bled into Wednesday.
On Wednesday, the Dow Jones Industrial Average fell 354 points, or 0.7%, while the S&P 500 plunged 0.9%. The Nasdaq dropped 1.3% after hitting a record high in the previous session.
Financial stocks similarly sold off earlier this year after Altruist launched an AI tool that can create personalized tax-planning strategies for users.
But Wall Street is especially worried about Muse since Meta clinched partners like PayPal and Plaid, a fintech platform, and the company already boasts a userbase of billions across Facebook, Instagram and WhatsApp.
Muse has faced some pushback, notably from Amazon, which blocked the AI agent from completing purchases on its website.
Experts have also said that financial stocks could easily reverse course if the industry figures out a way to use the new technology to its advantage – and fast.
“The question is which companies adapt quickly enough to benefit,” said White, adding that AI could help financial services firms and banks lower costs and provide better customer service.
Martin agreed, saying, “The players who want to stay up on things will also use such tech, meaning some of them could get a lot more relevant.”
Anthropic, for example, recently launched tools powered by its Claude bot that are partnered with Schwab and Vanguard.
Many customers might also be hesitant to hand over their finances to an AI bot, an advantage for the traditional finance industry.
“For wealth management, a bot may make it easier to gather information or compare options,” White said. “Clients still need someone accountable for understanding their full situation, exercising judgment and helping them make decisions when the stakes are high.”
In the meantime, financial firms are bracing for an unfavorable environment as the 10-year Treasury yield briefly hit a 19-year high this week. Higher borrowing costs often squash demand for loans.