Altruist’s Hazel AI Spurs Selloffs at Major Custodians

Altruist introduced Hazel, an AI tax‑planning feature, in February. The announcement coincided with a sharp drop in shares of several large custodians. Altruist says it serves about 6,500 financial advisors across roughly 4,000 registered investment adviser firms.

Co‑founder Jason Wenk and advisor Alex Chalekian were in Zihuatanejo, Mexico, when the rollout reached markets. Chalekian recalled Wenk’s phone “started blowing up” with interview requests. Hazel can scan clients’ tax documents, identify who must take required minimum distributions and send batch notices, tasks that Altruist and early users say speed routine workflows.

Altruist raised $152 million in a Series F round that valued the company at $1.9 billion. Two years earlier the firm bought brokerage and custodian Shareholders Service Group. The company posts flat fee schedules online and offers a subscription tier called Altruist One that charges 0.01% per month, per household for premium services.

Advisors who moved to Altruist report lower transaction costs, automatic rebalances and fewer ticket charges. Chalekian reported moving nearly all client accounts to the platform in phases and trimming his firm’s average advisory fee from 1.25% to 0.84% of assets under management after the switch.

Altruist remains smaller than legacy custodians. Firms such as Schwab, Fidelity and Pershing hold larger asset volumes and maintain sizable operations, compliance and client‑service teams. Altruist has not yet released services including margin lending and options trading. The platform discloses revenue sources common in the industry, including cash sweeps and payment for order flow.

Mazi Bahadori, Altruist’s chief operating and compliance officer, acknowledged the company is not profitable and said leadership prioritizes product development and advisor value over short‑term earnings. Bahadori described the business model as focused on building modern systems that can reduce operating expenses tied to older technology.

Consultants and analysts have flagged questions about Altruist’s ability to scale compliance, legal and service operations as the firm grows. Reviews of the company called for clearer disclosure on assets under custody, a path to profitability and evidence the platform can serve large national RIAs with complex needs.

Some observers linked the February stock moves to investor concern that AI could automate cash management and reduce fee revenues that support custodians. Altruist executives have defended their use of payment for order flow as a source of high‑quality execution and say their cash sweep rates are competitive with peers.

Altruist leaders emphasize collecting advisor feedback and iterating on product features. Chalekian noted the firm asks detailed questions about advisors’ pain points and acts on that input. Wenk has written that Altruist aims to reach a leading position in custody services; Bahadori used the phrase “gradually, then suddenly” to describe expected growth.

The company’s current priorities include adding more advisors and assets while expanding back‑office, compliance and product capabilities to serve larger, more complex advisory firms. The platform’s technology and fee transparency have attracted early adopters; questions remain about scale, profitability and its ability to win the largest advisory clients.