Meta’s launch of the consumer AI product Muse prompted a market repricing of traditional brokerages and wealth management platforms, sending Charles Schwab’s stock down 6% on Tuesday to its lowest level since early July and more than 8% below its price at Muse’s release.
The moves were mixed across the sector: Robinhood rose to a new yearly high on the day, LPL Financial fell 7%, Raymond James dropped 3.5% and Interactive Brokers declined 1%. The XLF ETF, which tracks the financial sector, fell 2% on the day and has retreated roughly 6% from its early-month high.
Muse Prompts Reassessment of Brokerage Business Models
Markets are weighing whether AI features like those in Muse will erode fee-based barriers that many financial intermediaries rely on. Although Meta’s AI assistant says it will not trade on users’ behalf or provide investment advice, it already offers tools to track investment performance, assess progress toward goals and analyze portfolio allocations. Those capabilities have led investors to question whether some brokers, advisors and wealth platforms can sustain current fee models.
Jimmy Lee, founder of The Wealth Consulting Group in Las Vegas, said the services most likely to be impacted are middle-layer offerings such as billing, reporting and trade execution.
Robinhood and Charles Schwab Diverge
The two brokers have shown contrasting market responses. Robinhood launched an AI agent tool in May that can trade and manage portfolios on behalf of users; after rebounding on Tuesday, the stock is up about 10% this year and has gained roughly 1,200% over three years. By comparison, Charles Schwab has risen about 83% over the past three years, while the XLF ETF is up about 65% over the same period.
Charles Schwab announced a partnership with Anthropic last week to develop a Claude tool for financial advisors, and earlier in May it launched an AI tool integrated with its research department’s analysis.
Options Market Reflects Bearish Bets on Schwab, Bullish on Robinhood
Options activity showed clear differences in sentiment. On Tuesday, Charles Schwab’s options volume exceeded its average by more than five times, with put purchases nearly double the number of calls. The most active contract was a put expiring in mid-January next year with a $90 strike, implying a bet the stock will fall by about 13% over the next three months. Offsetting that was a notable sale of puts with a $95 strike expiring on October 16.
Robinhood’s options flow ran the other way: call buying was roughly twice put buying on the day, with over 80% of approximately $95 million in options premiums going to calls. The most actively traded contract for Robinhood was a $125 strike call expiring this Friday.
A higher interest rate environment could further weigh on brokerage valuation multiples. Piper Sandler analysts previously warned that AI and asset tokenization may erode the business frictions that traditional financial intermediaries have long relied upon, and noted Charles Schwab’s dependence on idle cash from low-yield customers makes it more vulnerable to market repricing.
