Vanguard Acquires Altruist, the AI Custody Platform it Backed Six Years Ago
Vanguard has agreed to acquire Altruist, an AI-driven custody and software platform for independent financial advisers that it first invested in during 2020, on undisclosed terms. Britain and the EU are addressing a shortage of advice through rule changes rather than acquisitions.
Altruist: A Standalone Business with AI Capabilities
Altruist runs its own self-clearing brokerage, holding and settling client assets directly, with account opening, trading, rebalancing, billing, and reporting built on top. Its AI component, Hazel, reads an adviser’s live custodial data, CRM, email, and notes, then answers questions and drafts client plans.
Vanguard’s Argument for Acquisition
Vanguard’s chief executive, Salim Ramji, states, "Technology can help close that gap by enabling advisors to serve more people and serve them better, while preserving the human judgment and relationships at the center of good financial advice."
Deal Structure and Regulatory Considerations
The deal’s structure is noteworthy as Altruist will remain a standalone business with its brand, leadership, and operating model intact. This is to preserve the adviser relationships that Vanguard is acquiring. The acquisition is subject to regulatory approvals, though the specific details are not yet disclosed.
A Global Trend in Financial Services
Europe is addressing the same shortage with a different set of players. Private banks like Coutts and Revolut are targeting higher-net-worth individuals, while the UK’s Financial Conduct Authority (FCA) has introduced a targeted support regime for firms to make suggestions to underserved customer groups.
Technological Innovations
MDOTM, a London-based company with offices in Milan and New York, recently raised $27M for a system that rebalances portfolios and generates client commentary for Amundi and Zurich Bank. This technological innovation underscores the growing emphasis on automation in the financial sector.
A Diverse Approach to Solutions
While America consolidates ownership of the pipes advisers work through, Europe continues to debate regulated permissions for advice. Both continents are tackling the issue from different angles, reflecting a global shift in financial services.
By Ana-Maria Stanciuc, Editor-in-Chief, TNW.