Vanguard is purchasing Altruist, the AI custody platform it invested in six years prior.

      Vanguard has reached an agreement to purchase Altruist, an AI-powered custody and software platform designed for independent financial advisers, a company it first invested in back in 2020, under undisclosed terms. In contrast, the UK and the EU are tackling the advice shortage primarily through regulatory changes rather than through acquisitions.

      Vanguard is acquiring the platform it has financially supported. The company has announced it will buy Altruist, a custody and software firm for independent financial advisers, founded on terms that remain undisclosed.

      Altruist operates its own self-clearing brokerage, managing and settling client assets directly, rather than relying on another custodian. It offers account opening, trading, rebalancing, billing, and reporting services.

      The AI feature of Altruist is known as Hazel. It analyzes an advisor’s live custodial data alongside their CRM, email, and notes to answer queries and create client plans based on that information.

      Vanguard emphasizes the issue of capacity. "Technology can help bridge that gap by allowing advisors to better serve more clients while maintaining the human judgment and relationships central to effective financial advice," stated CEO Salim Ramji.

      The most revealing aspect of the deal is its structure. Altruist will retain its brand, leadership, and operational model as an independent business because integrating it would jeopardize the adviser relationships that are being acquired.

      Several details remain unaddressed. There is no public information regarding the price, valuation, or the amount of Vanguard's 2020 stake, nor are the necessary regulatory approvals named.

      In Europe, the same advice shortage persists, but with different players involved. Private banks are targeting higher-end clients, with Coutts raising its minimum to £3 million and Revolut setting theirs at £500,000 to capture the clientele that has been overlooked.

      The UK regulatory response focuses on new rules rather than acquisitions. The Financial Conduct Authority estimates that 23 million consumers lack adequate financial coverage, and in April, it launched a targeted support regime allowing firms to provide suggestions to specific groups of consumers.

      This initiative allows firms to communicate with certain categories of savers about what individuals like them typically do, filling a gap that previously existed between regulated advice and unregulated guidance.

      The tech aspect is also present in Europe, albeit on a different scale. MDOTM, which began in London and has offices in Milan and New York, secured $27 million in July for a system that rebalances portfolios and generates client commentary for Amundi and Zurich Bank.

      Thus, both continents are approaching the issue from opposite angles. The US is consolidating control over the systems advisers utilize, while Europe is still debating what advisers can communicate without requiring regulated permission.