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Saturday, Jul 2, 2022

Fintech Altruist Expands Portfolio to Investment Advisers

Altruist Corp., a Venice-based fintech startup building a digital investment platform for registered investment advisers, is expanding its outsourced portfolio offerings. 

It’s a move Altruist hopes will build significant scale in an industry disrupted by younger demographics.

Altruist is paying close attention to changes in the investment adviser industry and is pointing to the shakeup in the community in October when Omaha, Neb.-based brokerage TD Ameritrade Inc. and Westlake, Texas-based financial services giant Charles Schwab Corp. completed their $22 billion all-stock merger.

Altruist has emerged on financial radar screens because it requires no minimum to get onto its platform.

Altruist is not a Robinhood stock trading app for day traders. Instead, Altruist is targeting a universe of roughly 40,000 investment advisers registered with the Securities and Exchange Commission. These advisers, also known as RIAs, manage about 50 million advisory clients with portfolios totaling nearly $90 trillion.

The big player in the market is Charles Schwab and TD Ameritrade, which account for roughly 15,000 investment advisers. The combined company serves more than 24 million brokerage accounts that represent more than $5 trillion in client assets.

In an interview, Jason Wenk, Altruist’s chief executive and founder, disclosed that his business has amassed close to 1,000 advisers — a major milestone given how small the industry is as measured in terms of numbers of RIAs.

Altruist’s immediate cornerstone strategy is to expand its marketplace portfolio of outsourced management platforms. Earlier this year, it began with custom model portfolios that featured Valley Forge, Pa.-based Vanguard Group Inc. and Austin, Texas-based Dimensional Fund Advisors.

Now it’s offering three more portfolios for its advisers: New York-based Blackrock Inc.’s Target Allocation ESG (also known as environmental social and governance) series and Target Allocation ETF (exchange-traded funds) series; Scottsdale, Ariz.-based Redwood Investment Management’s engineered risk-budgeted series; and Boston-based State Street Corp.’s active asset allocation ETF portfolios.

“We’ve been overwhelmed with the Vanguard and DFA funds. They’ve done much better than our projections,” said the 41-year-old Wenk.

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