Altruist's New Insurance Requirements for RIAs: What You Need to Know

If you're an RIA using Altruist as your custodian, there's an important update you need to be aware of. As of October 1st, 2025, Altruist has rolled out new insurance requirements for all RIAs on their platform, with a compliance deadline of December 31st, 2025. Let's break down what this means for your firm and how it compares to requirements from other major custodians.

The New Altruist Insurance Requirements

Altruist now requires all RIAs using their custodial platform to maintain a combined minimum of $1 million in insurance coverage. This coverage must include:

• Errors & Omissions (E&O) - covering claims of negligence, fiduciary breaches, or trade errors
• Cyber Liability - protecting against data breaches, phishing, ransomware, and other cyber threats
• Social Engineering Coverage - addressing fraud-related incidents and scams

This move aligns Altruist with industry standards set by other major custodians, though the specific requirements vary slightly across platforms.

How Altruist Compares to Other Custodians

While Altruist is following the lead of established players like Schwab and Fidelity, there are some notable differences in their requirements:

Schwab requires $1 million in total coverage comprised of:

• E&O
• Theft
• Social Engineering

Fidelity requires the same as Schwab, plus:

• An additional $250,000 minimum specifically for social engineering coverage

Altruist requires $1 million total with:

• E&O
• Cyber (this is the key differentiator)
• Social Engineering

Why This Matters for Multi-Custodian Firms

Here's where it gets interesting – and potentially complicated. If your firm custodies assets at multiple custodians, you'll need to meet the requirements for all of them.

For example, if you're with both Schwab and Altruist, you'll need to ensure your coverage includes cyber liability to meet Altruist's requirements, even though Schwab doesn't explicitly require it. Many firms that started with Schwab and added Altruist may find their current policies don't include the cyber component, requiring an adjustment to their coverage.

The Challenge of Investment Advisor Insurance

Unlike homeowner's or auto insurance where coverage is relatively standardized, investment advisor E&O insurance is anything but uniform. Each insurance carrier writes their own policy language, creates their own exclusions, and defines coverage differently. This means you can't simply shop based on price, limit, and deductible alone.

What looks like comparable coverage on paper might have significant gaps when you dig into the details. One policy might exclude certain types of cyber incidents that another covers. Social engineering definitions can vary widely between carriers. Even something as fundamental as what constitutes a "claim" can differ from one policy to another.

Why the December 31st Deadline Matters

According to Altruist's documentation, non-compliance with these insurance requirements could result in:

• Onboarding delays for new advisors
• Restricted account access
• Potential suspension or termination of your custodial relationship

For new firms joining Altruist, proof of coverage must be submitted within 30 days of your application. Existing firms have until December 31st, 2025, to provide their Certificate of Insurance (COI).

The Real Cost of Being Underinsured

While some RIAs view these requirements as just another compliance checkbox, the reality is that these coverages address very real risks. A single wire fraud incident, ransomware attack, or client dispute over a trade error can easily result in six-figure losses. The average cost for comprehensive coverage – typically less than $3,500 annually for smaller firms – pales in comparison to the potential exposure.

Taking Action: What RIAs Should Do Now

1. Review your current coverage - Check if your existing policy meets Altruist's specific requirements, especially the cyber liability component
2. Consider all your custodial relationships - Ensure your coverage satisfies requirements across all custodians you work with
3. Don't wait until the deadline - Insurance applications and adjustments take time, and waiting until late December could leave you scrambling
4. Work with a specialist - Given the complexity and non-standardized nature of investment advisor insurance, partnering with a broker who understands the RIA space and has access to multiple carriers specializing in investment advisor E&O insurance is crucial

How Box Professional Insurance Can Help

At Box Professional Insurance, we specialize in helping RIAs navigate these exact challenges. As an independent broker with access to the eight to ten carriers truly dedicated to the RIA space, we understand the nuances of each carrier's coverage and can ensure you're not just checking boxes, but actually protecting your firm.

Whether you're a sub-$50 million firm or managing $60 billion in AUM, we can help you understand your options and ensure you meet not just Altruist's requirements, but have the comprehensive coverage your firm needs.

Ready to ensure you're properly covered? Schedule a call with our team to review your current coverage and discuss how to meet these new requirements before the December 31st deadline.

Box Professional Insurance is an independent insurance broker specializing in investment advisor E&O insurance and comprehensive coverage solutions for RIAs. We work with firms of all sizes to ensure they have the protection they need in an increasingly complex regulatory environment.