Apr 17, 2023

Altruist – a modern custodian built exclusively for RIAs – announced a new $112 million series D round of funding led by Insight Partners, new investor Adams Street Partners, and continued support from existing investors. And notable industry leaders Bill McNabb, Ron Carson, and Marty Bicknell also participated in the round. This funding round came just weeks after the acquisition of advisor services firm SSG and the launch of a new brokerage offering that cemented Altruist as the third largest custodian as measured by a number of firms served. And this new funding round adds to a previously undisclosed $110 million series C raised in November of 2021 and led by Declaration Partners with Venrock, Insight Partners, and Vanguard participating, bringing its total funding to more than $290 million. Altruist’s vertically integrated approach makes them the first company ever to combine clearing, custody, and a complete suite of advisory software into one solution. And after a year of unprecedented growth, the company plans to invest the funds to further develop and expand its service offerings to empower a broader segment of the RIA market, including mid-sized firms that manage between $100 million and $1 billion in total assets. Altruist was launched in 2018 by Jason Wenk, an industry veteran who has founded and led multiple billion-plus dollar technology-enabled RIAs. And as an advisor, he experienced first-hand the unique challenges that inhibit RIA growth and limit the reach of great, affordable financial advice. Altruist has taken a new approach to bridging the gap between financial services and technology with an exclusive focus on RIAs. And the company has rebuilt the advisor technology stack from the ground up, vertically integrating a clearinghouse, custody, and all-in-one software that offers account opening, trading, reporting, and billing. Plus Altruist is highly praised for its exceptional customer service and a modern client-facing application that gives households complete transparency into portfolio performance. Altruist nearly tripled assets under management in 2022 while growing revenue by over 1,700% year over year. And while many startups, especially in the financial technology sector, have seen growth slow in 2023, Plus Altruist has rapidly accelerated growth and recorded record asset inflows in Q1 2023. The company also expects to reach profitability this calendar year after less than 5 years of operating history. Registered investment advisor (RIA) market: The registered investment advisor (RIA) market is booming with $128.4 trillion in assets under management and over 3,000 new firms launched annually. And with their personalized service and fiduciary obligations to operate in clients’ best interests, RIAs are rapidly becoming the trusted choice for households seeking support in managing and building their wealth. But only 1 in 3 Americans currently work with a financial advisor due to access and affordability. The majority of RIAs that work with legacy custodians are burdened with high operational costs, paper-based processes, and disjointed software preventing firms from servicing more households at a lower cost. KEY QUOTES: “We’re incredibly bullish on Altruist and the RIA market more broadly. I have seen few investment opportunities in my career to back a team with this level of domain expertise and depth of vision, and applied to such a significant and compelling market need.” – Brian Stern, Partner and Co-Head of Growth Equity at Declaration Partners “While the RIA industry has evolved rapidly over the past 20 years, the custodians serving them have not. Legacy custodians have little incentive to innovate and rebuild technology that would enable advisors to scale and reach as many people as possible.” – Altruist CEO Jason Wenk “Altruist has quietly invested an immense amount of time and resources building a truly modern custodian for RIAs. A vertically integrated platform that puts clearing and custody at the core is a game changer for advisors. It’s a deeply technical problem at every level that the team has solved with an intuitive user experience that’s unlike anything the RIA industry has ever seen.” – Jon Rosenbaum, Managing Director at Insight Partners “Great, human financial advice starts with the client relationship. We believe our relentless focus on innovation and commitment to help RIAs save time and improve their offer through automation is the only way to improve financial outcomes at scale.” – Chief Product Officer Harpreet Ahluwalia Trending on Pulse 2.0