Founded in 2018, Altruist, a financial technology company specialising in custodial services for Registered Investment Advisors (RIAs), has announced a $169 million Series E funding round. This latest investment brings the company’s total funding to over $450 million and values Altruist at over $1.5 billion.
The Series E round was led by ICONIQ Growth, a venture capital firm focused on technology growth companies. Yoonkee Sull, General Partner at ICONIQ Growth, will be joining Altruist’s board of directors. Existing investors Adams Street Partners and Sound Ventures also participated in the round, demonstrating continued confidence in Altruist’s vision.
This funding round comes on the heels of significant growth for Altruist. The company, which was founded by Jason Wenk boasts a 550% increase in revenue for 2023 and has tripled its assets under management (AUM) for two consecutive years. This impressive growth has positioned Altruist as the third-largest custodian serving RIAs, behind industry giants Schwab and Fidelity. Industry analyst T3 recognized Altruist as the #1 custodian that advisors are considering switching to in 2024.
Last year, similarly, Performativ, a Danish wealth management fintech company raised €5.5M to bring Europe’s wealth management into the 21st century.
Focus on innovation for RIAs
The traditional custodian landscape is dominated by large legacy institutions. Altruist aims to disrupt this space by offering a modern platform specifically designed for the needs of RIAs. “With a fully-featured and vertically integrated platform built for RIAs, Altruist is breaking through in an industry desperate for innovation,” said Yoonkee Sull.
Beyond safekeeping: Technology and service
While all custodians share the responsibility of safeguarding assets and complying with regulations, their services can vary significantly. Custodians can impact investment options, tax implications, portfolio performance, fees, and ultimately, the client experience. Altruist emphasises technology and service as key differentiators.
“In the 15 years I spent serving clients as an RIA, we’d run into the same problems over and over,” said Jason Wenk, founder and CEO of Altruist. “Features that were available to retail investors weren’t available to people working with advisors.” Altruist’s platform aims to address this gap by providing advisors with user-friendly tools to automate tasks, improve efficiency, and ultimately, dedicate more time to client service.
Cost savings and advisor benefits
Altruist positions itself as a cost-effective option for RIAs. The company eliminated software fees for advisors using its brokerage accounts in 2023 and recently introduced a new fee schedule touted as the most transparent and competitive in the industry. These cost savings are seen as a major benefit for independent advisors.
“Altruist is able to innovate much faster than legacy incumbents because the company is solely focused on RIAs,” said Robin Murray of investor Adams Street Partners. This focus translates to increased productivity and cost savings for RIAs partnering with Altruist.
What we think about the startup
Beyond technological innovation, Altruist is scaling its service team to support its expanding client base. Recognizing the importance of responsiveness, the company emphasises its ability to resolve client inquiries promptly. “Addressing time-sensitive client requests is a big part of an advisor’s job,” said Wenk. “Our ability to resolve issues quickly is one of the main reasons RIAs are leaving legacy custodians and coming to Altruist.”
Altruist has a pipeline of new products and services planned for 2024, including a high-yield cash account (5.10% APY), expanded services, and upcoming tax management features.
Altruist’s significant funding round and rapid growth suggest a strong demand for its RIA-focused wealth management solutions. The company’s emphasis on technology, service, and cost savings positions it as a potential disruptor in the traditional custodian space. With a focus on innovation and a commitment to advisor needs, Altruist is likely to grow in the years to come.
