Culver City-based Altruist has become a giant among custodian firms. It’s built exclusively for Registered Investment Advisers, which are financial and investment management advisers that are registered with the Securities and Exchange Commission.
Altruist has raised $112 million in a series D funding round led by Insight Partners and new investor Adams Street Partners, as well as existing investors. It previously raised $110 million of series C funding back in November 2021, which was undisclosed until last week. This brings its total funding to date for the company to about $290 million.
A custodian safeguards a company’s assets, which may include bonds and stocks, to protect against theft or loss. Some, like Altruist, offer further services such as account management, compliance regulation and settlement of financial transactions. Mazi Bahadori, Altruist’s chief compliance officer and executive vice president of operations, said that the company sets itself apart as an all-in-one platform and vertical solution. He said that it’s the only custodian in the country that’s built and designed exclusively for RIAs. The new funding will be put towards expanding and improving its platform’s features.
“We plan to reinvest heavily into research and development,” Bahadori said. “We really pride ourselves in our tech and our ability to be super responsive to our customer needs, and so the funds are going right back into the product and the platform so that we can continue to build elegant account opening, faster, simpler transfers … and easier portfolio rebalancing.”
The series D funding comes shortly after Altruist’s acquisition of Shareholders Service Group, an advisory services firm. Altruist said in a statement that it’s currently the third largest custodian in terms of the number of firms served, with more than 3,000 RIA clients. These clients include mid-sized RIAs that manage between $100 million and $1 billion in total assets.
Bahadori said its platform is unique in how integrated its services are and the fact that all paperwork is digitized, which reduces filing errors and streamlines administration work. He said one the biggest qualities that sets it apart from other businesses is that it doesn’t compete with its clients.
“The larger (custodian) incumbents, they all have retail investment businesses that are trying to acquire the same clients that our RIA customers, (and) their RIA customers, are looking to acquire and service,” Bahadori said. “That never happens at Altruist, we don’t have a retail business and we never will have a retail business. We are the only custodian in the United States built and designed exclusively for RIAs.”
