Vanguard, the world's second-largest investment firm, has acquired the wealth management platform Altruist in a deal reportedly valued at $4 billion. This acquisition is poised to integrate Altruist's AI-driven financial planning tool, Hazel, into Vanguard's substantial retail and Registered Investment Advisor (RIA) operations. Hazel, launched by Altruist Founder and CEO Jason Wenk, promises to generate comprehensive financial plans in just four minutes and is priced competitively at $3,600 annually per advisor, positioning it against market leaders like eMoney and RightCapital.
Altruist's Hazel has already garnered significant interest, with a waiting list of advisors eager to utilize its capabilities. The tool aims to streamline financial planning by reducing data gathering and transfer times from hours to minutes, offering a cost-saving alternative to multiple existing services such as Zocks AI and Holistiplan. Alex Chalekian, CEO of Lake Avenue Financial, estimates that replacing three services with Hazel could save a typical firm $6,408 per advisor annually. The tool covers various aspects of financial planning, including retirement, investments, cash flow, basic estate planning, taxes, insurance, and risk.
The market for dedicated planning software for RIAs is substantial, estimated at least $135 million in annual recurring revenues, with an estimated 15,000 out of 18,000 RIAs already subscribing to such services. While Hazel seeks to disrupt this market, a key challenge lies in data integration. If rival planning firms like MoneyGuidePro, eMoney, and RightCapital, which collectively hold an 81.22% market share (eMoney 35.62%, MGP 24.23%, RightCapital 21.37%), refuse direct API access, advisors will need to convert planning documents to PDFs for upload. Vanguard has not yet confirmed how it plans to incorporate Hazel into its existing systems, but industry experts, like Stephen Chen of Boldin, anticipate its integration.
In a related development, Savvy Wealth, an AI-native RIA, recently secured $100 million in Series C funding led by Halo Fund, bringing its total funding to over $200 million since its founding in 2021. This investment values Savvy at $600 million and will be used to expand its proprietary AI-driven technology platform for advisors, including its Savvy Intelligence product. Savvy, which manages $9 billion in client assets and has doubled its advisor base to 150 this year, uses AI agents to handle tasks like customized investment reporting and financial plan analysis, with the goal of exceeding $100 million in annual recurring revenue this year. The company aims to make financial planning suggestions and analyses much faster, allowing advisors to focus on client interaction.
