Altruist was founded on October 8, 2018. Additional information about Altruist is available
on the SEC’s website at
www.adviserinfo.sec.gov. You can search this site by using a
unique identifying number, known as a CRD number. The CRD number for Altruist is
299398. The SEC’s website also provides information about any persons affiliated with
Altruist who are registered as investment adviser representatives of Altruist in any state.
Altruist is a registered investment adviser which offers a model investment portfolio
marketplace (“Model Marketplace”) through an automated platform on its website.
Altruist’s parent company, Altruist Corp, also offers certain accounting software to assist
independent third party SEC- and state-registered investment advisers (“Third-Party
Advisors”), and Altruist’s affiliated broker-dealer, Altruist Financial LLC, offers a brokerage
platform to Third-Party Advisors to open and manage client investment accounts. Neither
Altruist nor any of its affiliates offers tax, accounting or legal advice.
Altruist is a wholly owned subsidiary of Altruist Corp, a privately owned Delaware
Corporation headquartered in Culver City, California.
Allocation TPA Program
Altruist provides web-based non-discretionary advisory services through its Model
Marketplace. Altruist calls this program the Altruist Asset Allocation Third-Party Advisor
program (the “Allocation TPA Program”) and charges fees based on the value of assets
subscribed to the Allocation TPA Program. The Allocation TPA Program is provided via
Altruist and its affiliates’ proprietary platform located at
www.altruist.com(the “Website”).
The services included in the Allocation TPA Program are the provision of Altruist
generated model portfolios and the licensing of third-party-provided model portfolios
(“Third-Party Portfolios”) for use by Third-Party Advisors in advising their respective
clients (the “TPA Users”). The services are delivered solely through the Website.
Altruist does not provide its services in person or over the phone or in any manner other
than through the Website. Altruist encourages visiting the Website for additional
information.
Altruist’s services are designed to assist Third-Party Advisors. Such Third-Party Advisors,
in turn, act as investment advisers to TPA Users investing through the Allocation TPA
Program.
The Allocation TPA Program is a proprietary automated investment management
platform for use by Third-Party Advisors to advise their respective TPA Users through
customized portfolios of exchange traded funds (“ETFs”), publicly-traded equities, fixed
income securities, mutual funds, and closed-end funds (“CEFs”) (collectively,
“Investments”). In connection with the Allocation TPA Program, Altruist’s affiliates provide
Third-Party Advisors with portfolio accounting, trading, and account management
software.
Altruist acts as the limited agent of each Third-Party Advisor for the purposes of
implementing the Third-Party Advisor’s investment advice and directions, including by:
1.Reflecting the Third-Party Advisor’s configuration of TPA User model
portfolios and accounts participating in the Allocation TPA Program on the
Website;
2.Operating the Allocation TPA Program to (a) implement the Third-Party
Advisor’s directions with regard to portfolio selections, allocations,
modifications and replacements for the TPA Users’ accounts, and (b) perform
the automatic rebalancing for the TPA Users’ accounts in accordance with
the Third-Party Advisors’ directions; and
3.Initiating the trade order management process via Altruist Financial LLC,
which executes, clears and settles transactions through its independent
clearing firm, Apex Clearing Corporation (“Apex”), until approximately April
2023, and through itself as a self-clearing broker-dealer and custodian,
starting approximately April 2023.
Third-Party Advisors and TPA Users are urged to compare any account activity or other
information made available on the Website to account statements and confirmations
provided by Apex through April 2023 or by Altruist Financial LLC beginning April 2023 (as
the custodian of all TPA User accounts on the Allocation TPA Program).
The Investments in each TPA User’s account are held in a separate account in the name
of the TPA User with Apex, after being introduced by Altruist Financial LLC, or with
Altruist Financial LLC as a self-clearing custodian. All accounts managed by a
Third-Party Advisor through the Website are required to use Apex until approximately
April, 2023, and Altruist Financial LLC beginning approximately April, 2023, as the
custodian.
The ETFs, publicly-traded equities, and mutual funds purchased or sold on behalf of a
TPA User and/or held in TPA Users’ accounts can be either whole shares or fractional
shares, depending upon the amounts a TPA User invests in the particular security. The
Website enables dollar-based investing, whereby a Third-Party Advisor can buy a fixed
dollar amount rather than whole shares for its TPA Users. Altruist Financial LLC, acting
as agent of TPA Users in the transactions, aggregates all dollar-based purchases and
places whole share orders for executions. Thereafter, Altruist Financial LLC allocates the
fractional shares to the individual accounts of participating TPA Users. Fractional shares,
however, are typically not transferable outside of a TPA User’s brokerage account
because the financial system in the United States currently is structured only to
accommodate transfers of full shares. As a result, fractional shares are typically not
marketable or transferrable to another brokerage account.
In the event of a liquidation or transfer of the assets in a TPA User’s brokerage account to
another account, Altruist Financial LLC will convert such fractional shares to cash.
Third-Party Advisors, who act as investment advisers and agents for their TPA Users,
enter into Altruist’s Model Marketplace Agreement, which further details the services
provided through the Allocation TPA Program, the fees charged for such services, and
other terms and conditions of the Allocation TPA Program. Altruist does not provide overall
financial planning services to any TPA User, nor does it provide tax advice.
Summary of Roles and Responsibilities in the Allocation TPA Program (table):
PartyInvestmentPrimaryTradingResponsibleProvides/ModelTax
Adviser toContactAuthorityforGeneratesMarketplaceManage-
TPA Userfor TPAonSuitability ofModelFeesment
UserAccountsInvestmentsPortfoliosCharged byTool
Altruist forFee
Model(optional)
PortfoliosCharged
Provided byby Altruist
this Partyon these
Model
Portfolios
AltruistNoNoNoNoAltruist
generate
d
portfolios
Model
Portfolio Fee
No
Third-
Party
Advisor
YesYesYesYesTPA
Models
; TPA
Portfolios
NoneYes
TPA
User
N/AN/AN/APartially*N/AN/AN/A
Third-
party
provide
r
NoNoNoNoThird-Party
Portfolios
Model
Licensing
Fee
No
*TPA
Users areto reconfirm annually or update as needed with their Third-Party Advisor their current profile
information, financial circumstances, and investment objectives.
Fees and Compensation
Altruist will instruct Altruist Financial LLC – and by extension where appropriate, Apex –
as the custodian for the Allocation TPA Program, and Altruist Financial LLC or Apex will
act on such instructions, to deduct and pay to Altruist fees charged by Altruist for the
Allocation TPA Program (“Model Marketplace Fees”, “Tax Management Tool Fee”) from
Third-Party Advisors’ firm brokerage accounts or TPA Users’ brokerage accounts,
according to the instructions of the Third-Party Advisors and as authorized by the TPA
Users. Separately, the Third-Party Advisors will instruct Apex or Altruist Financial LLC -
through the portfolio accounting software features of the Website - to deduct their
advisory fees from the TPA Users, according to the authorization of the TPA Users.
Altruist’s Model Marketplace Fees are based on a percentage of the market value of the
assets in an account that are invested in model portfolios made available in the Allocation
TPA Program, and generally range from 0.00% to 1.00%. Specific fees for each model
portfoliocanbefoundontheAltruistLLCFee Schedule available at
http://altruist.com/legal.
The Tax Management Tool Fee is charged by Altruist for Third-Party Advisors’ usage of
Altruist’s tax management tools in connection with the Third-Party Advisors’ management
of TPA User accounts. The Tax Management Tool Fee is charged on assets invested in
TPA Models and TPA Portfolios (as defined below). This fee will be charged on the
portion of assets in a TPA User account which are invested in TPA Models and TPA
Portfolios, exclusive of assets invested in Model Marketplace model portfolios. Altruist’s
Tax Management Tool Fee will range generally from 0.00% to 1.00% and can be found
on the Altruist LLC Fee Schedule available at
http://altruist.com/legal.
Altruist’s fees are charged on a pro-rata annualized basis monthly in arrears based on
the value of assets in TPA User accounts which are enrolled in the Allocation TPA
Program and are subscribed to model portfolios or are utilizing tax management tools at
any point during the previous month. The TPA User should consult with their respective
Third-Party Advisor on the specifics of the Third-Party Advisor’s practices or
arrangements with respect to Altruist’s Model Marketplace Fees and Tax Management
Tool Fee, including as to whether the Third-Party Advisor will pay the fees or pass them
on to the TPA User, as well as the Third-Party Advisor’s own advisory and other fees.
Third-Party Advisors will pay a monthly subscription fee to Altruist Corp for portfolio
accounting software (“Accounting Software”) and general access to the Website.
As of the date of this Brochure, there are no minimum account size requirements for most
model portfolios in the Model Marketplace. However, the Altruist generated Strategist
model portfolio series has a minimum investment which starts at $2,000 and
varies depending on the equity allocation of the model portfolio. Additionally, the Altruist
Strategist Direct Index, when used as a standalone strategy (via Unified Managed
Accounts) has a $1,200 investment minimum. Please refer to the Strategist fact sheet
found on the Website for more details on minimums. Separately Managed Account
(“SMA”) model portfolios have minimums starting at $1,000. Altruist reserves the right to
impose minimum account sizes or values in the future at its discretion. Fees are not
negotiable.
Altruist or a Third-Party Advisor can terminate the Third-Party Advisor’s participation in
the Allocation TPA Program at any time generally or as to any TPA User. Each TPA User
can also terminate its Altruist Financial LLC brokerage account at any time pursuant to
the brokerage account agreement with Apex or Altruist Financial LLC, as appropriate.
Upon termination of a TPA User’s account, assets are transferred to another brokerage
account or liquidated, according to the instructions of the Third- Party Advisor (if
authorized by the TPA User) or TPA User, as soon as practicable and money is returned
to the TPA User, if applicable. Once the account termination process is initiated, Altruist
will only receive fees through the termination date (and not thereafter).
Altruist reserves the right to waive its fees or any part thereof for any period for any
Third-Party Advisors or TPA Users in Altruist’s sole discretion. To this end, Altruist may,
from time to time, elect to launch programs or initiatives whereby fees may be waived, in
whole or in part, for certain categories of Third-Party Advisors or TPA Users. Any such
program or initiative (i) is entirely discretionary to Altruist, and can be expanded,
narrowed, suspended, canceled or modified at any time by Altruist, and (ii) will be subject
to any rules, guidelines and/or terms and conditions created by Altruist in connection
therewith (which rules, guidelines and/or terms may be included in website landing pages
on the Website and/or elsewhere). To the extent any such program or initiative is
canceled or terminated, applicable Third-Party Advisors or TPA Users will once again be
charged the then-current fees on a going-forward basis. Altruist shall have sole discretion
in determining whether or not any existing or potential Third-Party Advisor or TPA User
meets the requirements to participate in and/or benefit from any such program or
initiative.
Other Account Fees
In the Allocation TPA Program, Altruist’s fees do not cover other related costs and
expenses, including certain charges imposed by Altruist’s affiliates, custodians, and other
third parties. These fees include transfer fees, administrative fees (such as for a returned
check or wire transfer), and other fees. You should expect that Altruist’s affiliated
broker-dealer Altruist Financial LLC marks up these fees, including to cover its overhead
and costs of doing business, reimburse its time and expense related to these fees, and to
attain a profit.
Altruist’s fees also do not cover the internal management, operating or distribution fees or
expenses imposed or incurred by a mutual fund, CEF, ETF or other fund, that reduce the
fund’s net asset value and performance and affect a TPA User’s portfolio performance or
an index benchmark comparison. If a TPA User’s assets are invested in any mutual
funds, CEFs, ETFs or other funds, the TPA User will incur these fees and expenses.
Further information regarding these fees and expenses may be found in the appropriate
prospectus, offering memorandum or annual report applicable to the fund. Altruist’s fees
will not be reduced to account for the above additional fees and expenses. Third-Party
Advisors and TPA Users should review all fees and expenses charged to fully understand
the total amount of fees Third-Party Advisors and TPA Users will pay.