Altruist eliminates software fees for RIAs

Advisors who custody exclusively with Altruist will receive free software, while firms that work other custodians will get the first 100 accounts for free.

Altruist has played the latest card in its ongoing efforts to woo independent advisors to its asset custody platform.

The Los Angeles-based company previously charged registered investment advisors $1 per account per month to use its portfolio management software. On Thursday, the firm announced it would waive this fee completely for advisors who custody entirely with Altruist. Advisors who work with other custodians will receive their first 100 accounts for free and be subject to the $1-per-account-per-month fee for the rest of their accounts.

While it may not sound like much, the move could certainly move the needle for firms considering Altruist as a destination for certain client accounts, said Zach Hubbard, director of financial planning and participant engagement at Green Spring Advisors.

“Looking at our offering specifically tailored towards wealth builders (those without assets to qualify for traditional advisor services), every dollar counts toward increasing margins on those clients and expanding our ability to serve more clients in that service tier,” Hubbard said in an email. “We haven’t officially made the switch to Altruist yet, but this definitely furthers their case.”

The move makes independent financial advice better, more affordable and accessible by eliminating what is often the most expensive part of an RIA’s tech stack, said Marc Greenberg, Altruist’s chief financial officer. For advisors spending between $40 and $70 per account every year on portfolio accounting software, the move could save thousands of dollars.

“Software and platform fees can become prohibitive to growth for large and fast-growing firms,” Greenberg said. “We are happy to offer a solution with scalable economics while simultaneously freeing up resources for more important things like client service, marketing, and operational efficiency.”

While eliminating fees is often a sign that a technology company is struggling to attract users, Greenberg denied that is the case at Altruist. The success of its own custody and clearing platform, which Altruist launched in March after severing ties with Apex Fintech Solutions, allows the company to offer its software for free, he said.

“We don’t want to discourage advisors from offering accounts with no minimums — translating their advice to all interested consumers,” Greenberg said in an email.

Altruist has quickly grown as a challenger in the custody and clearing market once dominated by Charles Schwab Advisor Services, Fidelity Institutional and BNY Mellon Pershing. Altruist has raised $290 million in funding, including a $112 million round in April, to offer an alternative to independent advisors, especially those unhappy about the merger between Schwab and TD Ameritrade.

In March, Altruist acquired Shareholders Services Group, which brought 1,600 RIAs to its platform. The deal pushed the number of firms Altruist serves past 3,000, making it the third-largest custodian in terms of RIAs served, behind Fidelity and Schwab.