Schwab says it already serves 11,000 sub-$100 million RIAs as Fidelity sets a deadline

Jon Beatty has a number for the smallest end of the RIA market: the $6 trillion Schwab Advisor Services custody unit he leads already serves 11,000 advisory practices with less than $100 million in client assets, a count he calls 'not by accident.' Schwab is ready to take in at least some of the sub-$100 million RIAs that Fidelity Investments has put on notice, RIABiz reports, though the welcome is informal and stops short of a promise.

The last clause carries the weight: a willingness to look at small practices is not a service agreement, and the account does not say what a small RIA would be offered once it arrived — pricing, service ratios, technology, the specifics an advisor wants in writing before moving client accounts. Existing relationships are evidence the platform can carry micro-practices; whether the next one gets identical treatment is exactly what the informal framing leaves open.

Fidelity supplied the occasion, having told sub-$100 million RIA clients to reach $100 million or leave by mid-2027, a threshold that converts a service-tier choice into a countdown for every practice sitting below it.

The economics underneath that deadline are older and duller than the deadline itself. Small RIAs have long paid little or nothing in custody fees, and the bargain the industry ran on, as the companion column describes it, was patience: custodians carried the unprofitable practices because survivors grew into the accounts that pay, and the winners covered the duds. Earlier coverage notes that Michael Kitces has called the RIA custody model 'broken,' treats the phrase as a deliberate overstatement made to prove a point, and then concedes the point underneath — practices that generate no fee are not where the margin is.

Schwab is not alone in saying it is open. Apex, Altruist and Robinhood's TradePMR have each said publicly they would take the small accounts, and the lineup makes TradePMR the surprise of the group: it had shifted toward serving a smaller number of large RIAs as a secondary or primary custodian. The custody executives making those commitments are Bill Capuzzi at Apex, Jason Wenk at Altruist and R. Scott Victoria at TradePMR.

Altruist's position has been building for a while; earlier this year a billion-dollar RIA left Schwab for Altruist, a shift tied to who owns the client record. That argument runs underneath this one: a custodian that keeps the smallest accounts is defending the relationship that holds the assets, while the challengers are selling tools and data the advisor keeps.

Tim Welsh, president of Nexus Strategy and a former Schwab RIA custody executive, reads the moment as an unfamiliar one for his old employer: Schwab is typically on the receiving end of the industry's criticism rather than delivering it, and he says the firm is enjoying a rare chance to land a blow at Fidelity while attention sits elsewhere. The calendar cooperates — Schwab's IMPACT 2026 conference is weeks away in Boston, Fidelity's home city.

Louis Diamond, chief executive of Diamond Consultants, calls the Fidelity decision a major strategic move given how many advisory firms sit below $100 million, and reads it as a push upmarket that frees service teams to handle larger relationships. Diamond's rationale is about capacity — the cost of staffing relationships that do not pay for themselves — and it is the arithmetic every custodian runs quietly. The column on the decision asks the sharper question, wondering why the firm that normally plays the long game is the one stepping back from the smallest relationships while competitors queue up to take them; Fidelity remains very much in the RIA custody business and, by the column's own account, was never built as a nursery for small practices.

For a principal, the useful way to read all of this is as a statement about cost per relationship: every custodian runs a service model with a floor beneath it, and the shakeout below $100 million looks less like a debate about which firm is kinder to small advisors than about where each one draws that line. Schwab says its service model can carry those micro-practices, while Fidelity says its line is $100 million and its service teams are better spent above it. Both are informed bets about which small firms grow, placed by firms that have watched the funnel for decades.

The alternative to a custodian's patience is a sale, and that market has not been idle. Earlier this month, when the Fidelity deadline was reported, the same week brought Concurrent's first platform purchase and HB Wealth's close on a Texas deal, with sub-scale books reading as sale inventory.

What Schwab has not done is put any of this in writing, which leaves the mid-2027 date as the real forcing mechanism for Fidelity's smallest clients. The next test is whether the welcome acquires terms before then, and Beatty's 11,000 is the number the market will hold him to.