Fidelity gives sub-$100 million RIAs until June 2027 to grow or move custody

Fidelity's custody business has told RIAs holding less than $100 million in client assets with the firm that they have until June 30, 2027 to clear that threshold or start moving the book, notices that went out this week, as Financial Planning first reported, and that land hardest on the smallest firms on the platform.

The threshold itself is familiar: Fidelity has long required $100 million from an RIA that wants to join its custody platform, but this week, per the report, the minimum was applied to firms already on it for the first time.

The report quotes Fidelity as saying the firm recognizes that changes require thoughtful planning and that firms need time to determine next steps for themselves and their clients, and it commits to servicing firms that choose to move their assets to another custodian. An industry source familiar with the change told the outlet that the custody business has changed substantially over the past five and ten years and that Fidelity responds by reviewing its policy periodically.

Size matters on the other side of the table, too: Fidelity's custody business is the second largest among the custodians that safeguard advisor-managed assets, behind Charles Schwab and ahead of Pershing and LPL Financial, a group Cerulli Associates estimates controls nearly 85% of the U.S. custodial market. That is the shortlist an advisor faces when a custodial relationship ends.

Custody has been a lucrative business for years, but the profit pool has narrowed, with much of the pressure tracing to broker-dealers' decision to stop collecting commissions on securities trades and firms trying to replace that revenue through cash sweeps—in which uninvested client cash is moved to banks to be lent out with only part of the return shared with clients—and through payment for order flow, which routes client orders to wholesalers in exchange for payments. Industry analysts have argued firms should consider charging custody fees set as a percentage of the assets they safeguard; Tim Welsh, the founder of the consulting firm Nexus Strategies, reads Fidelity's move as choosing a different route—cutting ties with the RIA clients that yield the least. He calls it dramatic and notes that some advisors receiving the notices have been with Fidelity from the beginning and never grew.

For the advisor on the receiving end, the custodian is less a vendor than the layer the practice runs on—accounts, reporting, billing and statements that carry another firm's name alongside the advisory brand—so the notice lands as a career decision rather than a procurement one. A platform change sits underneath recruiting, succession and the eventual sale of the firm, all at once.

The gap itself is easy to size: a firm sitting 20% below the threshold has to add a quarter of its current assets inside nine months to reach it, before any market movement is counted for or against, and producing that through referrals and new households across three quarters is a demanding ask. That leaves three routes—recruit a producing advisor or team whose book arrives with them, merge with a larger firm, or accept the platform change and find a custodian willing to hold a sub-$100 million relationship. The report does not say what minimums Schwab, Pershing or LPL apply to relationships they already have, and that is the first question any advisor pricing the third route needs answered.

The sale route is where the deadline does the most work: a firm that cannot close the gap on its own now has a date attached to the decision to stay independent, and buyers at larger RIAs and aggregators will likely treat the list of notified firms as a place to start conversations.

The threshold also changes how advisors hold assets. Because it counts assets custodied with Fidelity rather than the advisor's total book, as the report describes the notices, a firm can clear $100 million in total while sitting under the line at each of the custodians it uses. Custody diversification has long been a risk-management habit, but the new policy gives that structure a cost it did not previously carry; the natural reply, concentrating the book at one platform, is precisely what the threshold rewards.

Moving is not cheap, either: custodian technology now shows up as a line item of its own—the Schwab integration with Claude that this publication covered in September costs an advisor $240 a year per seat against a $4,800 list price—but a custody change is operational work spread across every account the firm manages, arriving with a client conversation attached.

Fidelity has spent this year arguing for two service tracks and segmentation by balance sheet, an argument it made in an August outlook. A minimum enforced on the advisor platform applies the same instinct one level up, to the firms themselves. Custody platforms now compete for client assets rather than merely safekeeping them, and a platform with a size floor is making its preference explicit.

June 30, 2027 is the date, and the coverage does not say how many RIAs on the platform sit below the line. For an advisor shopping the shortlist this fall, the open question about what minimums the other three custodians enforce on existing relationships is the one to ask first.