Vanguard CEO Salim Ramji.

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Vanguard built itself into a $13 trillion investment giant largely through ultra-low-cost index funds, and almost entirely without acquisitions. Today, in a striking departure, the 51-year-old company announced that it’s buying financial-technology startup Altruist, a deal that reportedly values the startup at between $4 billion and $5 billion. The move gives Vanguard new sources of revenue beyond its thin fund fees, a larger foothold among independent financial advisors and technology that could make its own 2,000 advisors more efficient.

Founded in 2018 and based in Culver City, California, Altruist provides financial advisors with software to open client accounts, execute and clear trades and safeguard customers’ assets. It was last valued at $1.9 billion in an April 2025 fundraise, and it’s backed by venture capital investors including Venrock, Insight Partners and Iconiq.

Altruist founder and CEO Jason Wenk, 46, previously started and sold two investment advisory firms that each amassed billions of dollars in assets. He created Altruist after concluding that existing technology forced advisors to choose between giving a small number of wealthy clients intensive service and providing limited attention to a larger customer base.

Letting financial advisors do everything digitally has been a big boon to Altruist’s business. Wenk says his company can on-board a new investor in less than two minutes, which usually takes 30 to 60 minutes with incumbent platforms. Altruist also charges less for its services than Fidelity and Schwab, according to Nick Beim, a partner at Venrock who has led the firm’s investments in Altruist. Today, Altruist has 6,500 advisors on its platform and counts firms like Ritholtz Asset Management and Bryn Mawr Trust Advisors as customers.

Altruist makes money by earning interest on customers’ idle cash, lending out its customers’ investment holdings in return for securities-lending fees, earning trading-execution fees and offering premium tools like tax-planning features. In February, Altruist unveiled Hazel, an AI-powered tax-planning tool whose capabilities caught Wall Street by surprise, sending shares of Schwab down 4% and Raymond James down 9%. Beim says Altruist plans to expand the technology into areas such as estate planning.

Vanguard and Wenk declined to comment on the exact purchase price of the Altruist deal, which has been reported at values ranging from about $4 billion to $4.6 billion by the Wall Street Journal and Axios. Altruist will remain a standalone brand and will keep its leadership, according to a Vanguard press release.

The clearest reasons why Altruist is strategically important to Vanguard: it helps the Valley Forge investment behemoth diversify its revenue and expand its financial-advisor business. Vanguard has cut its index-fund fees to an average of 0.07%, compared with 0.44% for competitors, leaving little room for further price-driven growth. It has increasingly looked elsewhere for expansion. In 2021, Vanguard made its first acquisition, buying Just Invest, whose software helps advisors build personalized index portfolios. It later partnered with Wellington and Blackstone to offer individual investors products combining public and private assets.

In a statement announcing the deal, Vanguard CEO Salim Ramji, who succeeded Tim Buckley in July 2024, said demand for financial advice exceeds the industry’s capacity to provide it. “Technology can help close that gap by enabling advisors to serve more people and serve them better.”

Before joining Vanguard, Ramji led BlackRock’s ETF business and was a senior partner at McKinsey. Since taking over, he has pushed Vanguard further into advice and wealth management, creating a dedicated division in December 2024 and hiring former Fidelity executive Joanna Rotenberg to run it.

Just two weeks ago, Vanguard introduced custom model portfolios, allowing advisors to tailor clients’ investments and include funds from companies other than Vanguard. The market for these portfolios, which BlackRock dominates, has grown to $258 billion—roughly twice its size two years ago—according to Morningstar.

Buying Altruist gives Vanguard a foothold in the custody market, long dominated by Fidelity and Schwab. Independent registered investment advisors, or RIAs, now oversee $10 trillion in U.S. assets, and many are looking for easier-to-use custody platforms. Vanguard could also deploy Altruist’s technology among its roughly 2,000 in-house advisors, helping them serve more clients efficiently.