Altruist, the venture capital–backed fintech custodian often praised by advisors for its forward-thinking approach to custody and its low cost, took to X on Monday to apologize after advisors spoke out about a new fee schedule.
On Monday, the custodian reportedly sent out a new fee schedule to its clients that included a $50 maintenance fee for IRA retirement accounts and a $25 fee for Roth IRA conversions. The new schedule was posted to X, formerly known as Twitter, by Kevin Lum, founder of Foundry Financial, a small, Los Angeles–based RIA, and was first reported by Citywire.
Altruist founder Jason Wenk also took to X to admit to the mistake and provide clarity.
“Super embarrassing, but an email went out that was not the actual pricing schedule (it was a very early draft that was changed by our pricing committee),” wrote Wenk. “Things like Traditional IRA fees and Roth conversion fees were never intended to be charged. Our pricing philosophy in general is to always have the objectively best pricing in the industry for advisors and their clients. My sincerest apologies for the miscommunication, a corrected email and schedule should be going out shortly.”
The company quickly posted an updated fee schedule that removed the controversial maintenance fee for IRAs and the Roth IRA conversion fee.
“Altruist Community, we want to address two corrections to our updated fee schedule with transparency,” the company wrote across multiple posts on X. “Both the Annual IRA Account Maintenance Fee and Roth IRA conversion fee should have been listed as $0. We apologize for any confusion and frustration this has caused. We understand the importance of transparency and accuracy in our communications.”
The company also adjusted the retirement closure fee from $125 to $75 and added that the current Automated Customer Account Transfer out fee would not apply to retirement closure fees.
Lum in another X post had called raising or adding those closure fees “predatory” as “it wasn’t the agreement when a customer became a client.”
Altruist told RIA Intel in an email that the outgoing ACAT fee had not changed and previously existed but that they’ve “updated and simplified the retirement closure fee to be the same as a full ACAT out.”
“There are several misconceptions about fees, especially ones considered predatory like exit fees,” Wenk added. “After accounts close, brokerages still need to report for that calendar year all taxes (even if an account closes in January) and retain books and records for 6 years. They also have to make books and records available to support advisor audits and regulatory inquiries, which involves data and support costs. Exit fees partially recoup these costs but are not a profit center.”
The fee confusion is a surprising misstep for a company that is considered both tech savvy and forward-thinking in an industry that is slow to change. In T3’s most recent annual advisor software survey, Altruist was listed as the No. 1 custodian that advisors are considering switching to in the next 18 months.
The company debuted five years ago, with the goal of being commission-free and built specifically for RIAs. The custodian has zero platform fees and last year became self-clearing. To date, Altruist has raised $290 million, and it acquired the brokerage and custodian platform Shareholders Service Group last year.
The company now serves more than 4,000 advisors. Wenk told RIA Intel in February that the company’s year-over-year revenue growth was 600 percent and that it has had back-to-back yearly organic AUM growth of 300 percent.
“When I started Altruist, I think I understood the market reasonably well,” Wenk said at the time. “I knew what it would take to be considered desirable to RIAs. Some people think that the cost of switching custodians is high, but I think that if there is an obvious enough amount of value, then people will definitely switch.”
Altruist told RIA Intel that they are doing a “comprehensive review of our customer comms processes to ensure we have the appropriate checks and balances in place” in order to ensure this sort of thing doesn’t happen again.
They also stated that this was not a test or a stunt to gauge advisor reaction but a clerical error that “prompted additional feedback, followed by quick action in response to our advisor community.”
“We made a mistake,” Wenk told RIA Intel. “If we did things like other custodians, maybe there wouldn’t be mistakes, but there also wouldn’t be innovation and disruption and the things that produce products that are ultimately helping advisors drive better outcomes for their clients in the long run.”
According to Altruist, no new fees or updated fees have been processed or are set to process until May. If fees change, account holders will be given a notice period before a new schedule takes effect.
