Quick take: conversations with private companies - Altruist

View transcript

<p><strong>Your capital is at risk. Past performance is not a guide to future returns.</strong></p> <p>&nbsp;</p> <p><strong>Shan Shan (SS)</strong>: Altruist is a private company that provides custody and a vertically-integrated wealth platform for RIAs in the US – registered investment advisors or what we call IFAs, independent financial advisors, in the UK.</p> <p>Custody may be a bit of an unfamiliar word for many, but it's essentially the behind-the-scenes infrastructure that holds assets, settles trades, and keeps records. And, globally, custodianship for advisors is a $15 trillion-asset market.</p> <p>Jason founded Altruist in 2018. Today, it serves more than 5,000 advisors. It’s one of the fastest-growing platforms in the industry. We at Baillie Gifford participated in the latest funding round. So, thank you for joining us today, Jason.</p> <p><strong>Jason Wenk (JW)</strong>: My pleasure. You nailed our description so well.</p> <p><strong>SS</strong>: It’s a little bit like introducing your company to you. Well, I guess, bring us down to the basics. I am handing my assets to my advisor, and my advisor says, ‘your money is now in good hands’, what happens afterwards? And what role does Altruist play in the day-to-day life of an advisor and their clients?</p> <p><strong>JW</strong>: What’s unique about Altruist is that we vertically integrated all of the other tools that a financial advisor would need to serve their clients.</p> <p>Instead of just being a custodian, we also have this really elegant software layer, and trading tools, and client-facing apps, things that just make it much easier for a client to know precisely what they have, how they're doing, keep tabs on the work that their advisor is doing. And, as an advisor, it allows you to serve a lot of clients really well at scale with much lower kind of costs and a much higher degree of automation than if you were stacking these different pieces separately.</p> <p><strong>JW</strong>: So, I built two RIAs before starting an RIA custodian. In that first firm, I built a lot of my own software. As the firm grew, I started getting approached by other financial advisors wanting to know, ‘hey, would I resell or license some of the software that I built?’ That's how I started the second company, the one that you mentioned. That one grew very, very quickly, a very rapid pace, opening tens of thousands of accounts per year.</p> <p>And what happens is once you reach some level of scale, things that are inconveniences when you’re small become massive problems as you grow.</p> <p>The second company, basically, I built a bunch of software to try to make up for the limiting factors. And the experience was that you could only take the software so far. It's maybe a terrible analogy, but it’s like adding rockets to a horse and buggy.</p> <p>Finally, I grew frustrated enough that in 2018 I thought, ‘you know what would be more sensible than me trying to build the middleware of the software – the software that sits between the advisor and the custodian – is to just integrate the entire stack.’ And you do it all with modern cloud-based infrastructure. We were already envisioning AI products in 2018.</p> <p>It’s incredibly hard, by the way, to build a custodian. The technical build is super challenging. Regulation, compliance. It’s non-trivial and it requires a fair bit of time and capital and industry knowledge. There’s a lot of reasons why there hasn’t been many new entrants. Well, any new entrants, I should say, other than us.</p> <p><strong>SS</strong>: Altruist launched Hazel last year, which is this incredible AI agent that’s becoming a co-pilot for these advisors, empowering them to tax plan, schedule meetings, take meeting notes, and follow-up with the clients. But especially, a month ago or so, when you launched the tax planning, it sent a shockwave across the market in private and in public.</p> <p><strong>JW</strong>: When we look at Hazel, Hazel is designed to take care of all of those other things outside the custodian. So, it'll connect to your email, CRM [Customer Relationship Management system], whatever you’re using for documents. And there’s a mobile app, so you can sit it down on the table in a face-to-face meeting, it can join your virtual meetings, it can plug into whatever telephony system you’re using. And basically, it’s like that personal assistant that’s joining all of the conversations you’re having with clients.</p> <p>And it allows you to be very present. Obviously, then it will prepare you for upcoming meetings very automatically. It'll take the meetings you have. It’ll take the data, synchronise it across all of your other platforms. And then when it’s time to do things like planning, Hazel uses multi-agent models that effectively allow us to do planning in an AI native way. So, remove all the interfaces where you’re plugging in data and then running queries and producing static outputs. And it allows us to very much bespoke and personalize every experience for every client. And it’s insanely powerful.</p> <p>What’ll happen is like this, in one-to-three years, or 5 years, however long it takes, the quality will be expected to be very, very good. Everyone will have access. This is a good thing.</p> <p>So, access to great advice at affordable prices. This is going to be very good for consumers. But it definitely will force wealth management companies and the individual professionals to change how they do things. I think this is a big part of why there was this big stock market sell-off. Companies like Altruist are making elite access to advice essentially fully democratised. AI will force the same kind of required evolution of the space.</p> <p><strong>SS</strong>: So, this is fascinating. I think all of this actually will benefit the normal people, the end clients. And I love the word that you said, ‘required revolution’. You’re pushing this forward.</p> <p>Besides the shiny object, which is Hazel and AI today, what is sitting in the background, a little bit in the dark, is this infrastructure and the custodian system you build, which eliminates the human friction of mistakes, because the AI can directly absorb from the information on the infrastructure side. So that creates a lot of efficiency and thinking about the future.</p> <p><strong>JW</strong>: My view from the day I started the company was always that I wanted to be IPO [initial public offering] optional or public company optional, meaning build a business that’s so good that it would be well-received in the public markets, but it could fully stand on its own and be a very enduring and profitable private business as well.</p> <p>For us there are a couple of internal milestones that we have. The team knows what they are. They’re your classic ‘SMART’ goals. So, they are specific, measurable, actionable, relevant, timebound. So, they know what they are. And we know that if we hit those milestones, we could be a very, very successful public company. And yeah, I think there’s a good chance that happens for us in the next few years. But in the interim, I think it’s very comforting knowing that we have investors that I think share that same kind of time horizon. They want us to be great companies, and they’re happy being investors in a great private company or a great public company.</p> <p><strong>SS</strong>: Well, this has been fantastic. Thank you so much. We’re very proud to back you and the Altruist team, and it’s just starting with our partnership journey, and I look forward to many great things you’re bringing to the industry. Thank you so much.</p> <p class="MsoNormal">&nbsp;</p> <h3>Risk Factors</h3> <p>The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.</p> <p>This communication was produced and approved in May 2026 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.</p> <p>Potential for Profit and Loss<br>All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.</p> <p>This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.</p> <p>All information is sourced from Baillie Gifford &amp; Co and is current unless otherwise stated.</p> <p>The images used in this communication are for illustrative purposes only.</p>