RIABIZ INTERVIEW: Jason Wenk tells RIABiz one big unnoticed reason why he sold to Vanguard, and the Bogle-ish scenario he envisions for his eventual departure decades hence
The Altruist CEO and founder saw myriad conflicts in being acquired by a public company -- a problem for a company called 'Altruist' -- but also for someone who wants his AI lead to benefit people, not get turned against them.
6 min read
Brooke's Note: I got Jason Wenk on the phone Friday. We had published our article the day before about the obstacles Vanguard faces in making its purchase of Altruist live up to its phenomenal potential. The article centered around Jason himself – though not in a negative way. People like him and find him competent, and they believe his company's potential as part of Vanguard could be easily worth $4.6 billion. Yet, we have seen this movie before. Entrepreneurs – especially young ones in California who wear that impatience on their sleeves – can chafe inside a corporation. They can miss the ‘bro culture' of competitiveness, fast decision-making and maniacally casual dress. Wenk was good-natured about being characterized as a bit of a ‘bro,’ but he says a big gap of misunderstanding exists about who he is. Wenk brightened considerably when I listened to his case and offered up that he was describing more of a Kitces-style ‘nerd’ than a serial entrepreneur. And that is the crux of his argument about why he's sticking around. He says he's the original Bogle disciple who has finally found his way home. Better yet, he's home on his own terms, with the goods to honor his idol's legacy – and build his own. There was no explicit message to the naysayers. The implicit message is no amount of corporate restlessness or conflict (at least of the kind that crops up at a place like Vanguard) could send him back into the wilderness of capitalistic rationalizations that defer true client-first advice in the name of scale, shareholder returns and unit economics. Wenk will be tested according to the Aristotelian ideal, living a life of rational, virtuous activity.
Jason Wenk may have had 4.6 billion reasons to sell his company to Vanguard Group, but the reason he is staying there is not one of them.
“I really had more money than I could spend in 10 lifetimes (before selling the company),” he says in an interview with RIABiz.
What he hopes to accomplish in this lifetime is to provide financial advice in the United States that works in favor of investors.
“How do I get more people ahead financially?” he says. “When I grew up in West Michigan, nobody had advice or much money. My parents didn't. There are tremendous resources spent so people make bad decisions – most recently predictive markets, which are addicting to young people.”
The 46 year-old founder and CEO of Altruist, an RIA custodian and wealth platform for independent advisors and AI sub-brand, Hazel, is eager to answer the doubters' questions. Chief among them is whether he'll follow the familiar script of other so-called serial entrepreneurs.
Once their sale is consummated and integrated, they go looking for the kind of challenge that got them there – driven by both the carrot of fresh opportunity and the stick of corporate oppression.
“It's a bit of a farce that I'm a ‘serial entrepreneur’," he says. “It's always been in the pursuit of my passion [more quality, quantity and affordable financial advice]. That's been consistent for 26 years.” See: How a 33 year-old advisor ditched the Midwest for California and used mad blogging and SEO skills to hijack annuity-bound web traffic to propel giant growth
Autonomy counts
To sell to another company other than Vanguard, he says, would've risked all the gains of his life and particularly Altruist's – and Hazel. its transformative AI tools for advisors.
Wealth managers end up reaching a ceiling because of their dual fiduciary duties to shareholders and investors – with the latter tending to win out.
“Eventually, it morphs into: we have to do something for shareholders,” he says. “Eventually you have to choose sides.”
Putting corporate shareholders ahead of investors is just not an option for him, Wenk says.
“I named my company, ‘Altruist,’" he says wryly.
Vanguard, meanwhile, has addressed Wenk's need for autonomy by making Altruist entirely freestanding. Jason is remaining in Los Angeles, and Hazel is keeping its home in San Francisco.
AI alignment
Hazel presents Altruist with a second quandary. The brand represents artificial intelligence that has jumped out to a commanding “10X” lead in AI for wealth management, Wenk says. See: Altruist, again, has staggering 'AI' news -- 1,600 RIA firms subscribe to 'Hazel,' in one month -- and pipeline suggests 1,500 advisors will join per month for next nine months, CEO says
Getting that AI lead and its transformative possibilities under Vanguard is a giant plus, he adds.
“Let's make sure all the AI value accrues to investors,” he says. “We'll keep our foot on the gas there.”
In the broader universe, it's known as AI Alignment. It's the thinking around making sure AI systems' goals, motivations, and future actions align with human values, ethics, and intentions – not least avoiding catastrophic outcomes.
Knowing Jack
Wenk is comfortable that he and Vanguard both know what they are getting from each other because of their history.
Vanguard has been anything but a hands-off investor in Altruist going back to 2020, two years after its 2018 founding. The $12- trillion asset manager bought a big stake just past seed stage then kept investing to maintain its share in successive rounds. See: Jason Wenk raises $50 million from Vanguard Group and others, and Altruist may soon overtake Pershing's No. 3 RIA custodian spot, the Altruist founder asserts
“I've been working with Vanguard for about seven years, and we've had a Vanguard observing board member for seven years. They know who I am.”
And, Wenk says he knows Vanguard – and Founder Jack Bogle – even better.
“He [Jack Bogle] was my inspiration for Altruist,” he says. “I read everything from Jack Bogle.”
Bogle was a prolific author whose first book “The Little Book of Common Sense Investing” (2007) set the foundation for what became the “Bogle Way” of investing.
Wenk says Bogle removed “friction” from investing on the asset management side of the business. Now he plans to do the same for financial advice.
“We had to build Altruist to remove friction.”
Sharing passions
Wenk says he has also gotten to know Vanguard c-suite's culture and c haracter by working closely with its ex-CEO Bill McNabb.
But he is also pleased with Vanguard's rank and file because they share his laser-focused passion.
"You get to know these people and they are passionate to this day." Vanguard is not stodgy like people think. They have this singular focus."
Pressed on whether he'll truly stick around at Vanguard, Wenk is adamant.
“My interest in starting a venture fund is zero,” he says.
Wenk says what is most likely to send him to pasture is the same thing that bounced Bogle himself – Vanguard's strict retirement age limit of 70. Bogle died at 89 in 2019.
What Wenk likes about it is that Bogle himself imposed the limit and then abided by it even after the Board offered him a waiver.
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