Meet Hazel, the AI tool that sparked a stock market selloff

Subscribe to enjoy similar stories. Financial advisor Douglas Boneparth chuckled when he saw the sharp selloff last week in wealth management stocks over concerns about tax planning updates to an artificial intelligence tool from fintech Altruist. Boneparth, who has been using Altruist’s AI-powered Hazel platform for several months, says the market was finally waking up to something he has been experiencing firsthand: AI is beginning to transform the wealth management industry.

“The hype is real," says Boneparth, founder of Bone Fide Wealth, a financial advice firm in New York. Although the tax planning functionality is still new, its value is already apparent, he says. “That’s an area where you can put hard-earned dollars back in your clients’ hands." Boneparth and other advisors using Altruist’s Hazel say it has been a productivity booster for them, especially compared with legacy systems at other firms.

But its significance is broader than tax planning: It indicates that AI in wealth management may be moving from back office functions to core aspects of what a financial advisor does for a client. Why Hazel. Hazel is essentially writing code to analyze or solve particular problems on behalf of advisors, Altruist CEO Jason Wenk says. It can do this work in a couple of minutes, he says.

“It materially changes the labor component of financial planning," he says. “You can drop any tax document into Hazel, say a Form 1040, and Hazel can summarize the document and then seek to find ways to lower the tax bill for that client." Hazel’s tax-planning function is one of several updates that Wenk anticipates launching over the next several months, focusing on different aspects of the financial planning process. Altruist charges