S&P: Mercer got roughly half of first-half 2026 net new assets from custodian referrals

Roughly half of Mercer Advisors' net new assets in the first half of 2026 arrived through custodian referral programs, according to an S&P Global Ratings report on the RIA's new credit rating. S&P wrote on Sept. 9 that the reliance could limit margin expansion and that using the channel requires Mercer to pay referral fees to its custodian partners. Recent diversification into other channels could help, the report added, as reported by InvestmentNews.

Mercer's custody sits with the two sponsors that refer it the most business: Schwab holds $57.7 billion of the RIA's regulatory assets and Fidelity holds $20.9 billion, per Form ADV filed Sept. 17. Those are regulatory assets, a different measure from the $111 billion in client assets Mercer reports; between them, the two sponsors hold $78.6 billion of the regulatory total.

Schwab will raise the asset minimum for its client referrals to $5 million from $2 million on Jan. 5, 2027, after lifting it from $500,000 last year. Mercer CEO Dave Welling told InvestmentNews the change fits how the program is already used: "The focus of our efforts with Schwab has more been on the segments where they really need us. So the majority of clients that we close through that program were already over $5 million, if not over $10 [million]," he said, adding that the partnership's benefit is concentrated where Schwab has said it most needs help.

InvestmentNews reported that some advisors have raised concerns about Schwab competing to keep clients as its in-house advisor teams grow; Schwab has said more than half of Schwab Advisor Network's net flows come from referred clients with $10 million or more in investable assets.

The $1.9 billion refinancing Mercer announced last week includes a $1.65 billion term loan B, a $250 million delayed draw term loan, and a $340 million revolver. S&P assigned a 'B' issuer credit rating to Mercer parent OG Crimson Parent Inc. ahead of the transaction. S&P expects S&P-adjusted debt to EBITDA above 7x at closing, declining afterward on organic growth and free cash flow, and EBITDA interest coverage improving to 2x-3x by 2027 from slightly below 2x at close. Mercer expects the new loan's rate, 1.75 percentage points below its prior debt, to save $35 million to $40 million in interest in 2027, InvestmentNews reported.

S&P put Mercer's organic revenue growth, excluding market returns, at 11% in 2025 and 6% in 2024, slightly ahead of peers. Welling's account suggests the higher minimum may touch less of Mercer's pipeline than the earlier move from $500,000 to $2 million did, since most of what he says the firm closes through Schwab was already above $5 million.