Schwab offers an informal welcome to Fidelity's sub-$100 million custody clients

The contest for Fidelity's smallest custody clients now has a named suitor, and he arrived carrying a number: Jon Beatty, who runs Charles Schwab's $6 trillion RIA custody unit, says the firm already serves 11,000 sub-$100 million practices — the same cohort Fidelity has told to find another home — and that the count is "not by accident." For an advisor at one of those firms, the figure does more work than any pitch page, because it says Schwab has been running a book of small practices as a business, not waiting for them to ripen into something worth serving.

What Schwab is offering is real but unspecific: Schwab Advisor Services is ready to take in at least some of the sub-$100 million RIAs Fidelity put on notice, and its welcome is informal, stopping short of a promise — no published service tier, no stated pricing, and nothing the firm can be held to if the volume of arrivals tests what its service teams can absorb.

The backdrop is Fidelity's turn upmarket: on 2 October, Fidelity sent letters giving custody clients under $100 million until June 2027 to move, and confirmed the letters, while the alternatives advisors named at the time came with conditions of their own. A follow-up found no fee option to stay — the mechanism by which earlier minimum increases let small firms pay to remain clients — and Michael Kitces called that hard no bizarre. RIABiz's own analysis treats the exit as surprising for a firm that has usually been willing to play the long game with small clients, which leaves advisors planning against the June 2027 date rather than around it.

Schwab is not alone in saying it will take them: Apex, Robinhood's TradePMR and Altruist all made their openness public, with Altruist's Jason Wenk, Apex's Bill Capuzzi and TradePMR's R. Scott Victoria among the custody heads offering a landing spot. An open hand costs a custodian nothing, so the useful work for an advisor is sorting the firms for which small practices are an operating segment from those for which the phrase is a courtesy.

Schwab's 11,000 micro-practices are the strongest evidence any of the suitors has put forward, and they were not assembled for this occasion, which matters for a $50 million practice weighing a move: the platform it joins either has a service model that already runs small accounts at scale, or it has a promise. Schwab's number says the first; the informality of the welcome says the firm is not yet committing to terms in public.

Service and price are the two screens an advisor would run, and the public material answers neither: nothing states what Schwab, Apex, Altruist or TradePMR would charge a $60 million practice, how each would staff it, or what minimum either side could walk away from. One cost that now shows up on the custody bill is technology: reporting on Schwab's Claude integration priced AI at $240 a seat, small change per advisor and a different number once it is multiplied across a firm and folded into the platform budget, which is why advisors comparing landing spots should be pricing the whole stack rather than the ticket charge alone — two custodians can quote the same headline and leave a small firm with different bills and different amounts of human help.

TradePMR is the surprise on the list: once a landing place for small RIAs, the Robinhood-owned custodian shifted course to serve as a secondary or primary custodian for a smaller number of large RIAs, which makes its public openness a statement about where it intends to compete rather than a description of the desk a sub-$100 million firm would get today. Apex's and Altruist's willingness was expected given their legacies, so their openness was already priced in, and neither detail disqualifies a custodian — both are the kind of thing an advisor should ask about directly, since the answer is a service model and not a slogan.

Tim Welsh, president of Nexus Strategy and a former Schwab RIA custody executive, reads the moment as Schwab finally on offense, writing that "Schwab is almost always the punching bag, not the boxer" and describing a once-in-a-generation chance to toss a bomb at Fidelity just as Schwab IMPACT 2026 runs in Boston, Fidelity's home city, within weeks. Custody postures announced on a conference calendar are worth watching precisely because they rarely outlive the conference, which makes the weeks after IMPACT the test rather than the event itself.

Louis Diamond, chief executive of Diamond Consultants, calls Fidelity's move a major strategic one given how many firms sit below $100 million, and reads the intent as focusing upmarket while freeing service teams to handle larger clients — a recruiter's read that points at the question the sub-$100 million cohort cannot answer from the outside: whether Fidelity's retreat is about capacity, segment economics, or both. Either way, the firms absorbing the clients inherit the same arithmetic — how many small accounts one service team can carry before the service stops being service.

For a $40 million practice with a June 2027 deadline, the questions that decide the answer are the ones only a term sheet settles: who will take the account, at what cost, with what staffing, and under what commitment. Schwab has answered the first, informally, and left the rest, and if the firm converts the posture into published terms for sub-$100 million clients during IMPACT 2026 in Boston, advisors will have something firmer to compare than a quote from a head of custody and a practice count that belongs to other people. If it does not, get the terms in writing before the assets move.