Wealth management startup Altruist has hired a former director at TD Ameritrade’s RIA custody business to join its executive team. Along with leading its strategy, he plans to correct a misconception about the company in the marketplace.
Pete Dorsey, a former national managing director at TD Ameritrade Institutional, is now the chief strategy and revenue officer at Altruist, the company announced Tuesday. Dorsey first heard of the startup about a year and a half ago and realized he and Altruist founder and CEO Jason Wenk had some mutual friends. Since then, he got to know Wenk and when the opportunity to join Altruist recently came, he took it. Dorsey started two weeks ago.
Dorsey has worked with RIAs for more than 20 years and spent the last 15 with TD Ameritrade. There he helped create a “scalable, responsible growth strategy” that resulted in over $650 billion in assets under management in 10 years and made it the second largest RIA custodian in the U.S.
He was one of the hundreds of employees TD Ameritrade recently laid off as it folds into Charles Schwab, the rival that acquired it in 2019 for $26 billion. “That decision was made for me, I didn’t choose to leave there. But when that became a reality, all the folks at TD and Schwab were super gracious about it,” Dorsey told RIA Intel.
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“Once I got a chance to take some time off and settle, and evaluate some options, this one quickly kind of came to the top,” he said about the job at Altruist.
The new executive will wear a lot of hats at the young company, but Dorsey will primarily be focused on the strategy to ramp up its growth.
In 2019, Altruist launched and advertised itself as a new digital, commission-free custodian for RIAs that could save them as much as 90% on technology costs. Palo Alto venture capital firm Venrock led Altruist’s $8.5 million seed round in 2019 and led another round of funding revealed in January for an undisclosed amount. (The former chief executive and chairman of Vanguard Group, F. William McNabb III, and Ron Carson, the founder and CEO of Carson Group, an Omaha, Neb.-based RIA that manages $14.5 billion, and a mystery investor also participated in the latest round.)
Altruist does not share the total number of RIA customers it has. But there is a waitlist of firms to join, and the company is intentionally onboarding about 100 RIAs each month to maintain a high level of customer service, according to Wenk.
With more investment dollars to spend, Dorsey will help the company ramp up that growth by hiring more people. “I feel very comfortable and very confident that if we get the right people in the right positions, that the growth will take care of itself.”
He also plans to refine its marketing. “There are some misnomers about what Altruist is and what Altruist is not,” Dorsey said.
In actuality, Altruist is currently an investment platform that sits on top of an existing custodian, Apex Clearing (which plans to become a publicly traded company via a special-purpose acquisition company, or SPAC). In January, Wenk told RIA Intel there were no plans in place this year to begin custodying assets itself.
But Dorsey says Altruist is still solving one of the biggest problems in the RIA space: streamlining disjointed software services that cost financial advisors time and money. Altruist says it effectively replaces portfolio management and reporting, and trading and rebalancing services. Its digital account opening can onboard clients in less than two minutes. The only widely used software services it doesn’t currently replace are customer relationship management, or CRM, financial planning, and accounting software, like QuickBooks.
Earlier this month, Altruist launched a platform for its advisors that includes model portfolios by Vanguard and Dimensional Fund Advisors, in addition to its own in-house strategies. The company also plans to add “a lot of integrations” this year, Dorsey said.
The expectations of advisors and investors have evolved, and Dorsey believes Altruist is positioned to serve them. “One of things that is exciting about this, we are going into a space where there are a lot of mature providers out there,” he said. And the company is always asking itself, “Are we doing things the right way? Or are we doing things because that’s the way that things have already been done?”
It might sound too improvisational a way to direct a business, but Dorsey doesn’t think companies in the industry can delay creative preparation for tomorrow.
“The future is not really coming anymore; the future of wealth management is right now.”
Michael Thrasher (@Mike_Thrasher) is a reporter at RIA Intel based in New York City.