On Wednesday, LA-based Altruist announced that it raised $50 million in its Series B funding round. Insight Partners led the round, with participation from previous investor Venrock and Vanguard.
Technology has the ability to increase the impact of the financial services industry by bringing those services to underserved groups of people. But as Altruist CEO and founder Jason Wenk noted in a 2019 company podcast, a lot of that technology is being used to replace people — with things like robo-advisors or commission-free trading apps. While these applications may be useful for democratizing financial services, they might not be helpful for people who need guidance. Just because someone has an app that can help them invest, doesn’t necessarily mean they’re learning how to do so successfully.
In many cases, people benefit from having an actual human as their financial advisor. So Altruist uses technology to give these human financial advisors the tools they need to serve more people for less money.
Altruist allows registered investment advisors to open accounts, invest, build models, provide reports and bill clients from one platform. By streamlining these operations so investment advisors can charge less, and by doing away with high account minimums, Altruist aims to make working with an investment advisor more affordable. It also makes it easier for investment advisors to do their jobs.
“Just like any financial advisor, Altruist wants to help people feel great about their money. At the same time, we want to help our industry innovate beyond the antiquated and expensive legacy tools that impede financial advisors and their clients,” Wenk said in a statement. “There are millions of people who want real, quality financial help, and there are thousands of advisors who want to serve a diverse community of investors. Altruist is here to bridge that gap.”
Altruist says it will use this new funding to “enhance operations” within the company and expand its product portfolio. It also plans to hire, with over 30 open jobs currently listed on its website. These openings include jobs in marketing, engineering, customer success and more.
With this funding, Jon Rosenbaum of Insight Partners will be joining Altruist’s board of directors. Insight Partners managing director Jeff Horing will take an observer seat on the board.
“Altruist’s vision requires both deep fintech innovation and empathy toward not only its RIA customers, but also their clients. We’re confident in the management team’s ability to deliver world class SaaS applications while ultimately improving the well-being of consumers who are looking to save,” Rosenbaum said in a statement. “We’re confident Altruist is the platform that will transform the financial advising industry in practice, not just in concept.”
