Fidelity gives custody clients under $100 million until June 2027 to move

Fidelity has told custody clients holding less than $100 million in client assets that they have until June 30, 2027 to clear the minimum or begin the process of moving off the platform, according to the company, which confirmed a letter an advisor shared on social media. The requirement applies to the firm's RIA custody business—the clearing and custody operation that includes National Financial Services LLC—and it reaches the firms already inside rather than only those trying to get in.

The letter reads, "At Fidelity, we regularly evaluate our business model, brokerage platform and client relationships to ensure they align with our long-term strategy," and a spokesperson said by email that the firm "has committed to providing firms with time to evaluate their options," while the same letter promises the firm will remain "committed to servicing your needs during this period of transition"—language a sub-$100 million firm can hold the custodian to while it works out where its accounts go next.

The threshold Fidelity is now enforcing has been climbing for a long time: the firm set a $15 million minimum in 2008, according to industry watchers, then in 2013 charged rather than evicted, imposing a $2,500 quarterly fee on firms with under $15 million in client assets on the platform. The bar for advisors new to the platform had already reached $100 million, which makes this change about the firms that grew on Fidelity's rails and stalled below the line, and, as this publication reported, there is no equivalent fee this time; Michael Kitces called the absence of a paid option bizarre, noting that past minimum increases let small firms buy their way onto the platform.

For the breakaway math, the important qualifier is what did not change: a team leaving a wirehouse with a book under $100 million could not have opened at Fidelity under the new-advisor rule, so that door was already shut, and what has gone is the platform's role as a waiting room where a small firm could sit while it grew into the size Fidelity wanted. The firms now being pushed off will arrive at their next custodian with a deadline attached, and displacement is a weaker negotiating position than selection, which likely puts them in a different seat at the table than a breakaway team shopping the same platforms.

The destination list is short, and each name needs reading. Fidelity is the second-largest RIA custodian behind Schwab, which has no publicly reported minimums for RIAs to custody with the firm, the simplest answer for a firm that just needs a home. Custody, though, is only the first of the two bargains a growing firm strikes with a platform, and the second is lead flow: Schwab has been raising the thresholds for advisors to join its client referral program as it seeks to manage those clients itself, and it has shown a willingness to charge RIAs directly for platform access, having priced an AI integration at $240 a year per seat. Fidelity runs a similar referral program with fewer participants than Schwab's, and nothing in the reporting says what referral access a displaced sub-$100 million firm can expect when it lands.

Altruist chief executive Jason Wenk joined a LinkedIn thread on the minimum to assert that his firm could serve advisors who need to leave Fidelity and to question whether $100 million would hold as the threshold, but that pitch carries a moving part of its own, because Wenk is working through the final steps of selling Altruist to Vanguard, a deal announced earlier this year, and the reporting does not say where a Vanguard-owned platform would set its own minimum.

Tim Welsh, president and founder of Nexus Strategy, has raised the prospect that $100 million is not where the climb stops, writing a white paper on Fidelity's move as part of a series on the realities of the custody business, and for an advisor picking a landing spot that is the claim that changes the arithmetic, because a firm that has to move platforms twice absorbs the disruption twice.

The questions to put to each destination follow from what Fidelity put in writing: what is the platform's minimum, and is it stated publicly; does referral eligibility travel with custody, or is it negotiated separately at a firm already rationing it; does the new custodian commit in writing to servicing a transition, the way Fidelity has promised to service a departure. That last commitment is the one small firms should test hardest, since the mechanics of the move are the part of the job a firm with three or four employees is least equipped to run alongside its regular business.