Taking a significant share in a large and growing category dominated by a small handful of incumbents is always difficult. You need to fight static inertia, loyalty, and “the way things have always been done.” You need to understand the customer better than competitors, solve their problems from first principles and create pull in the market creatively by rethinking traditional distribution strategies. But if successful, the impact can be tremendous.
We believe Altruist is on an incredible journey to transform the retail registered investment advisor (RIA) market with exceptional products and become one of the leading companies serving RIAs.
We are excited to lead Altruist’s Series E financing and join forces to help empower RIAs to deliver better outcomes and experiences for their clients. The round follows an incredible 2023, during which Altruist tripled its assets under management for the second consecutive year making it one of the fastest growing businesses we have ever partnered with. In the five years since its launch, Altruist has become the third-largest custodian by number of firms served, and industry analyst T3 reported that Altruist is the #1 custodian advisors are considering switching to in its most recent survey.
How did the company get here?
Over 15% of US wealth management assets are managed by RIAs, and this continues to grow steadily. Yet, RIAs have had to rely on a small handful of incumbent custodians and a number of poorly integrated tools that often result in increased overhead costs, poorer client experiences, and operations encumbered by manual processes. The status quo limits advisors’ ability to scale and takes time away from their focus on deepening client relationships, problems that are compounded for breakaway advisors and fast-growing RIAs.
Founder and CEO Jason Wenk, who has been building in the space for over two decades, is acutely aware of these pains. In fact, he was the representative customer for many years, having founded and run two high-growth RIAs himself. On meeting him, we were immediately struck by Jason’s depth of experience, extensive knowledge of the industry and the deep trust he has built within the RIA community. Even more palpable is his unwavering commitment to making financial advice better, more affordable and more accessible.
In response to these longstanding challenges, Jason decided to go deep into the core infrastructure to rebuild the entire technology stack from the ground up. Over the last few years, Altruist has built a comprehensive, vertically integrated platform that combines clearing and custody infrastructure with a robust software suite for RIAs that streamlines end-to-end workflows. The platform enables advisors to seamlessly open and fund accounts, transfer assets, bill, report, trade and rebalance in minutes. The platform is powered by automation and enables deep personalization, reducing unnecessary paperwork and freeing up valuable time for advisors to do more meaningful work. The team also worked hard to successfully launch self-clearing to enhance the products and services they can provide, making it the only self-clearing custodian in the market singularly focused on serving RIAs. Of course, Altruist also enables customers to leverage their existing tools and data through high quality integrations, and has built in modularity to make transfers and multi-custodian adoption easy.
And they are delivering! RIA customers across the board are benefitting from these innovations. Steward Partners has seen a 91% reduction in client onboarding time by switching from Schwab to Altruist. Windle Wealth found that Altruist meaningfully cut its operational workload. Firebrand Wealth is spending more time investing in client relationships than ever before and Kiplinger Wealth realized significant savings on administrative costs after switching to Altruist. We spoke directly with many other RIAs who are raving fans, giving Altruist a remarkably high net promoter score. Some of the fastest-growing RIAs in the US today partner with Altruist, and we believe the company is enhancing RIAs’ ability to grow and focus on what matters.
What's next?
Only 5 years old, we believe that Altruist is still in the early innings of its journey, with the potential to ultimately support an increasingly broader base of the RIA market. The company’s product- and customer-obsessed team has built an exciting roadmap to support the increasing pull from both existing and new customers looking to move more assets to its platform.
As partners to several fintech businesses globally, we have also seen how making financial products more broadly available through an intuitive, transparent, and simple product experience can drive significant adoption in historically difficult-to-penetrate markets. We believe innovation in the retail RIA space has been severely lagging and, with products like the recently announced 5.1% APY cash management product, Altruist will be well-positioned to continue to help drive the industry forward.
With this new funding, we are thrilled to be joining the team at Altruist and look forward to supporting the company’s mission to empower RIAs to better serve their clients.
Published:
May 2, 2024
