Fundraising

Altruist’s latest fundraising deepens ties to Vanguard

Digital brokerage firm Altruist is deepening its ties to Vanguard with its latest round of fundraising.

The Los Angeles-based company, which offers technology and a trading platform to financial advisors, brought in $50 million in a funding round led by venture capital and private equity firm Insight Partners. The capital infusion includes follow-on participation from Vanguard and VC firm Venrock.

It’s unclear how involved Vanguard was with previous fundraising rounds, but Altruist seems to be aligning itself with the investment management giant. In January, Altruist announced that former Vanguard CEO F. William McNabb III would join its board, and the digital brokerage recently added Vanguard models to its platform.

Cozying up to Vanguard moves in opposition to many large financial institutions. Fidelity Investments and TD Ameritrade have made access to Vanguard funds more expensive for investors, while some wirehouses like Morgan Stanley have banned financial advisors from putting clients into Vanguard mutual funds, according to the Wall Street Journal.

“Our investment in Altruist demonstrates our continued commitment to helping financial advisors better serve individual investors with a modern, digital-first investment experience,” says a Vanguard spokesperson in an emailed statement. The firm declined additional comments on its investment in Altruist.

Altruist founder and CEO Jason Wenk

While Altruist has in the past pitched itself as a more digitally enabled and cost-effective alternative to custodians like Fidelity, Charles Schwab and BNY Mellon Pershing, the company did not describe itself as a “custodian” or offering “custody services” in its funding announcement. Altruist now describes itself an “all-in-one” digital platform for advisors, including account opening, investing, building model portfolios, reporting and billing.

Altruist declined to respond to questions about its relationship to Vanguard, why it no longer refers to itself as a custodian, or what it has planned for the new infusion of capital. The firm also declined comment on how much Vanguard models will cost advisors using Altruist and how the firm will generate revenue from them.

Altruist’s goal is to innovate beyond antiquated and expensive legacy tools that impede financial advisors and their clients, says Jason Wenk, the company’s founder and CEO, in a statement. The company has also eliminated account minimums to let advisors serve clients with fewer assets.

“The world is changing and financial advisors need to adapt to meet the expectation of investors — current and future,” Wenk says. “Modern financial advisors require a modern platform to serve that expanding market.”

Part of that strategy may include becoming a preferred destination of advisors who want to offer Vanguard products to clients.