RIA custodian Altruist has laid off about 50 employees representing a roughly 15 percent reduction in staff, the company’s CEO Jason Wenk told InvestmentNews. Despite the layoffs, Wenk says Altruist maintains a “fairly clear path to profitability” and is on track to finish this year with annual revenue growth of over 70 percent.
“This wasn't financially motivated, like we're trying to save money,” Wenk said. “It was, how do we point as many resources as possible at the most important few things so that we can make as big of an impact for advisors and their clients.”
RIABiz was first to report news of Altruist’s recent layoffs, which are the company’s second layoff round this year after RIABiz reported that 37 job cuts were made in January. Altruist started this year with 460 employees but is now at 398, Wenk told InvestmentNews. The latest round of layoffs impacted all departments of the company on a fairly even basis, Wenk said, but he added that customer-facing roles were among the least impacted.
“We're still hiring in almost every department, and probably most actively recruiting great engineers. But the skill set that we might be looking for is going to be highly targeted towards those areas of the product that drive the biggest impact for customers,” said Wenk.
Altruist’s website currently has 23 open roles it is looking to hire, mostly within its engineering and product departments. Wenk did discuss the role AI is playing in Altruist’s operations as the company competes in the RIA custody market dominated by legacy giants Schwab and Fidelity.
“We definitely are all in on AI. [...] I wouldn't say that was a big driver here, but we certainly are able to just get a lot more done with less people,” Wenk said. “You have two very large companies [Schwab and Fidelity] with substantial resources dominating the market share. If you expect to compete in any way, shape, or form, you have to operate probably 10x better than them, maybe multiple orders of magnitude. You better build really good products, build them very fast, and have substantial automation.”
In addition to internal AI usage, Altruist debuted its AI-powered assistant Hazel earlier this year for its over 5,100 advisor clients. “We're using AI across almost every single aspect of the business, from finance to compliance to recruiting, engineering support and we're getting very material lift from those,” added Wenk. “It doesn't impact our hiring that much. What it really impacts is how many customers we can serve without having to have a huge team, and how much we can develop in a relatively short amount of time.”
Wenk said that Altruist will have a record year of net new assets and total assets will have increased by 50 percent while operating margins have improved every quarter. Revenue per employee has gone up by 70% this year, according to Wenk, while Altruist has zero debt and has not “touched a penny” of its $152 million fundraise announced in April.
“We have a fairly clear path to profitability. We could be profitable right now if that was the smartest thing to do with our balance sheet, but when you're growing really fast, you're getting a higher return from the cash on your balance sheet by investing it in the business, investing in growth, than if you left it on the balance sheet earning four or five percent,” said Wenk.
“What you've probably seen the last two years, three years, is that most of the best performing companies in the world, many that are producing record revenues and operating at record efficiencies, are simultaneously reducing the total number of people they have,” he added. “We'll have less overall spend and we'll get to profitability faster, but had we done no layoffs at all, we still would have been [on path to being] meaningfully profitable.”
April’s Series F funding for Altruist valued the company at $1.9 billion and followed its $169 million raised in May 2024. Altruist has offices across Los Angeles, San Francisco, and Dallas, with Wenk intending to eventually open an office in New York. For non-remote employees, Altruist requires staff to work in an office at least three days per week.
Among those laid off by Altruist was its head of content Will Steiner, who had been with the company since April 2022, according to his LinkedIn. “If you got hired at Altruist, you're really good. These people were fantastic. And there's a few people I've already done reference calls for that are getting recruited by other companies,” said Wenk.
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