Digital Custodian Altruist Takes On Schwab, Fidelity With New RIA Model

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Fintech and custodian Altruist plans to launch its own affiliate RIA model, a move that could deepen its relationship with advisors, while pushing into territory traditionally occupied by legacy firms like Charles Schwab, Fidelity and Pershing. The program is designed for advisors who want independence without having to deal with the costs and intricacies of running their own businesses. It also gives advisors a new affiliate option as the advisor flight to independence hits new highs. “Strategically, it’s a brilliant move,” said Louis Diamond, CEO of Diamond Consultants. “We’re seeing a massive shift in advisors who don’t want to start their own RIA.” 

Altruist’s approach is more direct than those of bigger players, Diamond said. Affiliate programs at the major custodians technically run through groups including NewEdge Wealth, Private Advisor Group or Sanctuary Wealth. “This is different in that it’s the custodian itself that’s going to be the RIA,” he said. 

Take a Load Off

Altruist Advisors, which is set to launch broadly in the fall, would take care of compliance operations, and under the 1099 structure, advisors would be considered representatives of Altruist, but still own their client relationships and operate their own brands. Altruist has had to turn away thousands of advisors because it didn’t offer an RIA model, said company COO Mazi Bahadori. “They want to be an independent advisor … but they just don’t want to deal with all the hassles of running a business,” he told Advisor Upside. “So the timing certainly made sense.” 

The program comes after a banner 2025 for the independent channel:

• The channel had the largest number of advisor moves last year, gaining more than 9,400 professionals, according to Diamond Consultants data. 
• LPL Financial’s acquisition of Commonwealth actually caused many of the larger independent firms to raise their transition deals, heightening movement in the channel.

Break Free. The affiliate model can be attractive, especially to breakaway advisors with small to mid-size books who are new to the independent channel. Many prefer to outsource responsibilities from compliance and regulatory filings to payroll and cybersecurity. “I see this constantly with advisors in their 30s who want to go out on their own, but can’t justify the overhead,” said Jeffrey Judge, managing partner at Chesapeake Financial Planners. “The downside: You’re building on someone else’s platform. If Altruist’s priorities shift, yours shift with them.”

Altruist’s new model also raises concerns about potential conflicts of interests, Judge said. Could it lead to a situation in which affiliated advisors are prioritized over outside RIAs that just use Altruist for custody? “It’s theoretical [but] if affiliated advisors start getting better pricing or tools, the ‘platform for everyone’ story falls apart,” he said.