RIA Custodian Altruist Raises $112M, Set to Go Toe-to-Toe with Schwab and Fidelity

Registered investment advisor (RIA) custodian startup Altruist has new funding to ramp up its growth as a competitor in the custody business and is prepared to go toe-to-toe with the likes of Charles Schwab and Fidelity.

The firm announced a $112 million Series D funding round led by Insight Partners and Adams Street Partners, along with participation from industry veterans Bill McNabb, former Vanguard CEO, Ron Carson, Carson Group founder and CEO, and Marty Bicknell, Mariner Wealth president and CEO.

In addition to a previously undisclosed $110 million round in November 2021, led by Declaration Partners, Altruist has raised a total of $290 million.

The company plans to invest the funds to further develop and expand its service offerings, including mid-sized RIA firms that manage between $100 million and $1 billion in assets.

In early March, Altruist revealed it became self-clearing, allowing it to settle its own trades in client accounts. That change allowed Altruist to provide custody for RIA client assets.

Last month Altruist also purchased Shareholder Services Group (SSG), a brokerage and custodial platform, which brought 1,600 RIAs to the company and lifted the number of RIAs doing business with Altruist above 3,000, making it the third largest custodian, behind Fidelity and Schwab, in terms of number of firms served, according to CEO Jason Wenk.

“We’re incredibly bullish on Altruist and the RIA market more broadly,” said Brian Stern, Partner and Co-Head of Growth Equity at Declaration Partners. “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.”

Wenk said assets tripled over the past year even before the SSG acquisition, and that the firm grew revenue by 1,700% year over year. Wenk says 2023 is set to be a year of growth for the business.