In a move that highlights increasing pressures faced by stock pickers on Wall Street, Peter S. Kraus, the chief executive of AllianceBernstein Holding, was ousted by the money manager’s controlling shareholder on Monday.

The abrupt shake-up, which included the appointment of six new board members to the AllianceBernstein board and the removal of nine, comes as investors continue to abandon higher-priced, actively managed mutual funds in favor of cheaper exchange traded funds that track a wide variety of stock and bond indexes.

AllianceBernstein, an institutional fund manager rooted in a culture of active stock management, has suffered a decline in investor money in recent years despite efforts by Mr. Kraus to reverse the company’s fortunes.

As part of the reshuffling, Axa Financial, the French insurance giant that owns the firm, named as chairman Robert B. Zoellick, a former president of the World Bank and senior economic official in Republican administrations.

Mr. Zoellick did have a stint with Goldman Sachs, but he has no hands-on experience in the asset management industry.

Seth Bernstein, a longtime JPMorgan Chase executive, was named chief executive.

Wall Street chief executives have been fired before, but such a drastic reshuffling — suddenly removing nine directors — is unusual. Alliance, or AB, as the firm has recently rebranded itself, manages about $500 billion, with a focus on managing bond and equity portfolios for large institutions like pension and sovereign wealth funds.

In a statement on Monday, Denis Duverne, the chairman of Axa, hinted that the board of AB was not satisfied that Mr. Kraus was moving fast enough to confront the extraordinary growth of passive investing in recent years.

“In an industry that is confronting significant shifts, we need to continue transforming the business to improve the quality of our investment solutions while delivering our services more effectively,” Mr. Duverne said.

According to Morningstar, 36 percent of the mutual funds it tracks now follow passive strategies — up from just 16 percent 10 years ago. Morningstar believes that the share of index driven strategies will increase to 48 percent by 2021.

Active managers have been struggling for years to come up with a strategy for confronting the tremendous flow of money to passive investment strategies, but the recent pickup in money moving to exchange traded funds is forcing many to act sooner rather than later.

The industry leaders, Vanguard and BlackRock, attracted record-setting investment increases in their E.T.F. lineups last quarter.

Industry experts and executives have warned that a vast reordering of the sector was inevitable.

“We are going to see a large consolidation in the asset management industry,” said Laurence D. Fink, the chief executive of BlackRock, at a mutual fund conference last Friday. He said managers were having a hard time finding returns that beat the market benchmark.

That it was Mr. Kraus who took the fall for his industry’s troubles was noteworthy.

More than most of his peers, Mr. Kraus, a former top executive at Goldman Sachs who has led Alliance since 2008, had said loudly and repeatedly that a rush of money into E.T.F.s posed a danger to market stability.

To counter this trend, Mr. Kraus argued for concentrated investment approaches.

But in a marketplace that had become enamored with lower-cost index options, his strategy had not yielded results and Axa decided not to wait any longer.