Fidelity says a few hundred advisory firms face its $100 million custody cutoff

Fidelity Investments expects a few hundred advisory firms to fall below its new $100 million custody minimum and leave the platform by June 30, 2027, a spokesperson confirmed Wednesday.

Those firms account for less than 1% of Fidelity's clearing and custody assets under administration, about $5.8 trillion across 3,300 RIAs, family offices and broker/dealers. The spokesperson did not give an exact firm count, according to WealthManagement.com, which first reported the estimate.

Fidelity, which the report describes as the country's second-largest registered investment advisor custodian, began warning sub-threshold advisors that they had until June 30, 2027 to hit the minimum or exit. There is no fee option to stay, as this publication reported last week, marking a break from past minimum increases that let small firms pay to remain on the platform.

New custody clients already must hold more than $100 million in assets, and a stipulation dating back a decade charges firms with under $15 million a $2,500 quarterly fee, or $10,000 a year.

Fidelity says most firms affected by the minimum are multi-custodial, which would presumably make a client shift easier than for an RIA that needs a completely new custodian, the report says.

Rival custodians and RIA platforms spent the week after the news broke pitching themselves as landing spots on social media and in the trade press. Altruist, Axos, Betterment, Interactive Brokers and Schwab — which the report identifies as the largest RIA custodian — all made their case.

How many firms actually fall below the threshold remains in dispute. FINTRX, which mined regulatory filings for its count, put the figure closer to 1,000 before withdrawing the report; a spokesperson said the firm “stands behind the data, which comes from publicly available Form ADVs filed by registered investment advisors,” and removed the post from its website pending clarification from Fidelity. AdvizorPro, which also used Form ADV information, reached a similar conclusion, the report says. Fidelity declined to comment on those reports, per WealthManagement.com.

For an advisor weighing a move, the practical question is whether the firm already runs a second custodian, because that decides whether this is a repapering project or a custody rebuild.