“The hype is real,” says Boneparth, founder of Bone Fide Wealth, a financial advice firm in New York. Although the tax planning functionality is still new, its value is already apparent, he says. “That’s an area where you can put hard-earned dollars back in your clients’ hands.”
Boneparth and other advisors using Altruist’s Hazel say it has been a productivity booster for them, especially compared with legacy systems at other firms. But its significance is broader than tax planning: It indicates that AI in wealth management may be moving from back office functions to core aspects of what a financial advisor does for a client.
Why Hazel? Hazel is essentially writing code to analyze or solve particular problems on behalf of advisors, Altruist CEO Jason Wenk says. It can do this work in a couple of minutes, he says. “It materially changes the labor component of financial planning,” he says. “You can drop any tax document into Hazel, say a Form 1040, and Hazel can summarize the document and then seek to find ways to lower the tax bill for that client.”
Hazel’s tax-planning function is one of several updates that Wenk anticipates launching over the next several months, focusing on different aspects of the financial planning process.
Altruist charges advisors $125 a month for Hazel’s administrative AI and tax planning capabilities. Advisors don’t have to custody assets at Altruist to use it, according to the company.
“You look at Hazel, and everyone can get access and the cost is trivial,” Wenk says. “That’s very disruptive. And now, start thinking about all the other work being done inside big wealth managers.”
It was enough to spook investors, who last week dumped shares of incumbent wealth management companies such as Charles Schwab, Raymond James Financial, LPL Financial, and Ameriprise Financial. The selloff came on the heels of a similar decline in insurance stocks that was also sparked by concerns about AI disruption.
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While the selloff in wealth management shares may have been overdone (advisors and clients aren’t about to jump firms overnight), investors are clearly focused on whether incumbents are moving quickly to adapt to AI developments. And they’re not the only ones. CEOs of major wealth management companies have used recent earnings calls to tout their technology investments. No one wants to appear to be falling behind.
“Many firms have already been integrating technology designed to make advisors more productive, improve client outcomes, and streamline back-office and planning functions,” Citizens analyst Devin Ryan wrote in a Feb. 10 research notes. “This isn’t a sudden shock to the system; it is part of a long-running evolution.”
Altruist’s challenge. Altruist directly competes with Charles Schwab in the RIA custody sector where both companies offer registered investment advisors technology and a trading platform. While firms like Ameriprise or Morgan Stanley don’t compete directly for the RIA custody business, the concern is that advisors could leave their firms to launch their own RIAs, in part to access cutting edge AI tools. And over time, more RIAs may add Altruist as a custodian.
That is what advisor Jason Barber did. In 2023, he left Edward Jones to launch Uptick Partners with his father, Steve Barber, and cousin Taylor Pankratz. Barber’s RIA uses both Charles Schwab and Altruist as custodians, keeping assets at both companies. He says he’s impressed with Altruist’s technology, not just Hazel. “From a tech perspective, they are miles ahead,” he says. “It’s like the difference between a Nokia cellphone and the iPhone.”
With regard to Hazel, Barber says the new tax planning function is “impressive,” but not perfect, and still requires some human involvement. As an experiment, he gave it a tax return that contained an error to analyze. “I submitted it to the AI just to see if it would catch it. It didn’t,” he says. “When I then prompted it to check it, then it caught it.”
Barber’s Nacogdoches, Texas-based firm has about $1.1 billion in assets under management, and he anticipates that Altruist could ultimately have about 15% to 20% of his firm’s assets. He says that he’ll keep using Schwab as a custodian because it has better private market capabilities and clients like the brand. “The challenge for Altruists is they just don’t have the name recognition,” Barber says.
But he thinks Altruist’s Hazel will prompt more advisors to rethink what kind of firm they want to be affiliated with. “What they’ll realize is that the [broker-dealer] world maybe isn’t where you want it to be—it’s the RIA world,” he says. “That’s where you can get access to this technology.”
Altruist has been growing quickly since it was founded in 2018, but it still hasn’t caught up to Schwab and Fidelity, the two biggest RIA custodians with trillions of dollars in assets. Altruist serves more than 5,000 advisors. It doesn’t disclose client assets on its platform.
In April 2025, Altruist said it had raised $152 million in an investing round led by GIC, a Singapore-based sovereign-wealth fund. The funding round valued Altruist at approximately $1.9 billion, the company said at the time.
Last year, the company laid off some staff as part of a restructuring that Wenk says was meant to better reallocate the company’s resources. Altruist has about 400 employees, and has been staffing up in San Francisco where it now has office space and about 75 employees dedicated to AI-related work. Wenk says the Bay Area is “the AI center of the universe.” He expects to hire another 50 to 70 people for that office.
“We have always had people in San Francisco, but it was at most a dozen people and they worked remotely,” he says. “By the end of this year, it will be our largest office.”
San Francisco was of course the longtime headquarters of Schwab, until the company relocated to Westlake, Texas, in 2021 (the move was announced in 2019). It maintains a smaller presence in San Francisco.
Incumbents respond. Schwab is a giant in the industry. It has more than $12 trillion in total assets, split between retail investors and independent advisors. It’s also been investing in AI capabilities and its technology.
“Technology has changed a lot in our business over the past 51 years, but we have always been part of that change and led it,” CEO Rick Wurster told Barron’s last week.
Joel Bruckenstein, a technology consultant and founder of the technology-focused T3 Advisor Conference, says it would be a mistake to underestimate Schwab and other incumbents. “Everybody is using AI in some way, shape, or form,” he says. “Pretty much every firm that comes to T3 is using AI to code faster.”
The industry’s heavily regulated and compliance-oriented nature may have prompted some firms to take a slow approach to adopting AI, he says. But that doesn’t mean they can’t catch up. “There is legacy technology in these companies, but that doesn’t mean they can’t do things quickly too,” he says.
It isn’t just industry incumbents like Schwab that have to keep an eye on AI. Advisors’ plethora of outside technology providers may be at risk too. In fact, there are so many third-party fintech providers in wealth management that industry guru Michael Kitces’s website has a one-page visual guide for advisors that currently lists hundreds of companies providing financial planning software, client relationship management systems, rebalancing software, portfolio reporting software, and so on.
“The advisor’s typical tech stack is 25 different things cobbled together,” says Josh Brown, CEO of Ritholtz Wealth Management. “It’s a jenga tower.”
Brown’s firm uses four custodians: Altruist, Fidelity, Betterment, and Schwab. If custodians provide more tools like Hazel, it could reduce the need for outside providers, he says. “The disruption will happen at the application software level,” Brown says. “I don’t think that is just about our industry. I think it’s going to happen in every other industry. So when Altruist announces Hazel tax mode is available, everyone is spooked.”
Wenk doesn’t think custodians’ technology can or will replace all outside software providers, but he agrees that AI is shaking things up in wealth management. It’s also changing his workflow. “Hazel joins me for all my meetings,” Wenk says. “I use it regularly. It analyzed my own tax return.”
Write to Andrew Welsch at andrew.welsch@barrons.com
