Ameriprise's $1.3B exit is a custodian decision, priced at 25 basis points

The registration hit the SEC on September 14, and the announcement followed this week: Fathom Advisors has taken $1.3 billion out of Ameriprise Financial Services' independent channel and opened an RIA in the greater Minneapolis area, led by five owners — Randy G. Doroff, his brother Todd P. Doroff, Michael D. Cassidy, Elizabeth W. Stokes and Mark J. Anderson — and a 22-person team that includes four other advisors and 13 support staff. Schwab Advisor Services is the primary custodian.

Read the Form ADV before the website. Fathom's fee schedule runs from 1.20% for households under $1 million to 25 basis points above $25 million, and $1.3 billion across nine advisors works out to roughly $144 million apiece; a bracket that thin at the top looks like a bid to hold the very large household rather than let price push it out, and it is the clearest sign that these principals mean to compete at the top of the market from day one.

The website pitch is the familiar one: greater freedom and flexibility, the ability to pick the technology, tools, platforms and investment solutions the team believes are best rather than being limited to one brokerage firm's shelf. What Fathom actually picked is a single custodian. That is the trade at the center of every independent-broker-dealer-to-RIA breakaway, and it deserves plain statement: the clients and the fee schedule travel with the advisor, while the infrastructure is rented; at $1.3 billion, the custodian relationship is a negotiation over cash, product shelf and renewal terms, not a back-office choice. As this publication has argued, custody is not a utility, and this team has just made the call that shapes its economics more than any hire it will make.

Fathom is the latest in a run of Ameriprise departures — a nearly $2 billion team left in June to open StackStone Wealth in Dubuque, Iowa; a $609 million group of Ameriprise lifers joined the RIA Integrated Partners in March; and two more billion-dollar-plus teams went to NewEdge Capital Group in January and February. Ameriprise says it has “long maintained strong retention among highly productive advisors” and continues to see a “robust pipeline” of advisors joining, but with roughly 10,000 brokers and no exact headcount reported, that retention claim stands on the company's word.

Tenure is the detail that cuts against reading these as raids: Randy Doroff spent all of a three-decade career at Ameriprise and a predecessor firm, Cassidy started at Ameriprise in 1998, spent six years at H.D. Vest, and came back in 2011, and Anderson arrived in 2017 from a local RIA and is now leaving to help run one. The independent channel is a workable place to build a book; at scale it also graduates its best producers into the decision that defines the rest of the career — whose name is on the door, and who sets the fee schedule. Fathom answered with a 25-basis-point bracket for the $25 million household, priced for the clients a breakaway cannot afford to lose.