Vanguard to buy Altruist to expand adviser services

Vanguard has agreed to buy Altruist, acquiring the startup’s wealth-technology and custody platform. The firms did not disclose financial terms. The transaction is expected to close later this year. Altruist will operate as a standalone business and will keep its existing leadership and brand.

Vanguard first invested in Altruist in 2020. Altruist provides software that lets independent financial advisers manage client portfolios and run back-office operations from a single platform. Vanguard will add that technology and custody capability to its adviser-facing offerings.

Vanguard Chief Executive Salim Ramji said in a statement, “Many investors in Vanguard funds choose to work with financial advisers, and far more people could benefit from access to financial advice than the industry can serve today.”

The acquisition is part of Vanguard’s effort to expand its wealth-management services beyond its index-fund business. Vanguard oversees about $12 trillion in assets. Since Ramji became the firm’s first external CEO, the company has been building a separate wealth-advice division.

Recent initiatives include launching private-markets funds for the wealth market with Blackstone and Wellington Management and hiring industry talent from rival firms. The firms stated integrating Altruist’s platform will strengthen Vanguard’s ability to serve clients who work through financial advisers and help scale digital capabilities for advisers.

The companies provided no additional operational or financial details beyond the expected closing timetable and the commitment to keep Altruist as a separate unit.