Small RIAs weigh joining a network to clear Fidelity's $100 million minimum

The message Fidelity sent to RIA customers on Oct. 2 set a hard floor under its custody platform—$100 million in assets by June 30, 2027, or the accounts move—and this publication's coverage that day captured the part that stung: no fee-based route for smaller firms to stay, a break from earlier increases that Michael Kitces noted had let sub-threshold firms pay to keep their accounts.

Financial Planning reported Oct. 6 that rival custodians, service providers and consultants have spent the days since pitching the firms below the line on several routes around the threshold, each with its own trade-offs; one skips the custodian search entirely, and Tom Prescott thinks too few advisors have noticed.

Tom Prescott, co-founder and managing member of Advisory Services Network in Atlanta, makes the case for joining a network rather than moving accounts: ASN doesn't buy the firms that join it, and members keep what Financial Planning calls a good deal of control over their own businesses—a qualifier worth reading twice. The Form ADV ASN filed with the SEC on Oct. 1 shows more than 150 member firms holding $10.6 billion collectively, a figure our records confirm across 29,663 accounts and 268 employees as of Oct. 3.

Because ASN custodies at Charles Schwab, Pershing and Goldman Sachs in addition to Fidelity, joining doesn't require abandoning the platforms a firm already uses; as Prescott put it to Financial Planning, 'We already meet Fidelity's requirement,' so any advisory firm that operates with or through ASN can continue its Fidelity relationship. He said the Oct. 2 news has no effect on those firms, and that advisory firms have already approached ASN because of the new minimum.

For a $60 million practice, the arrangement buys the avoidance of repapering—the account-by-account transfer Financial Planning describes as onerous, and which lands on the same people who handle client service and planning—while it costs a direct relationship with the custodian and the standing to negotiate pricing, service and technology on the firm's own behalf. For a founder who isn't looking to sell, joining a network is a structure decision rather than an exit.

A firm at $90 million is a different calculation from one at $30 million: the first can plausibly grow into the requirement before June 2027, while the second is deciding whether it ever gets there, and neither has to act today. Yet Prescott says the inquiries have already begun, which suggests smaller firms are treating this as a this-year decision rather than a 2027 one.

The benefit turns on a filing question, and Will Trout, director of securities and investments at Datos Insights, told Financial Planning that some aggregators claim to report all their affiliated RIAs' assets on a single Form ADV when they don't actually do so; as he put it, 'If the aggregator files separately for each acquired firm, the RIA doesn't benefit from scale,' a material question most RIAs skip over.

A single filing is what makes the scale real in the custodian's arithmetic; separate filings leave each firm roughly where it stood, with a shared brand and no additional leverage. The diligence that follows from Trout's point is a document read: whose assets sit on which ADV, and what the member agreement says about who holds the relationship with the custodian.

Prescott approaches the same problem from the other end: 'For a $50 or $75 or even $100 million advisor, what's going to be the service model?' he said. 'It doesn't matter whether it's Fidelity or any of the other custodians. What's going to be the service model which you're going to work under, and then how do they provide that service model in an economic fashion so that they're obviously making a profit?' Read plainly, that frames the $100 million line as a question about the cost of staffing a relationship; the custodian has answered that question for its own book, and the firms below the line are now being asked to price their own.

Fidelity's published minimum is the plainest version of an argument this publication has made before: custody stopped being a neutral utility, and a platform now chooses which relationships it will staff and at what size. The pressure lands in an unusual place, because instead of a shelf fee or a sweep change that shows up in client accounts, the $100 million line pushes firms toward intermediaries that fold their assets into someone else's filing. The custodian relationship ends up belonging to the network.

Firms have until June 30, 2027—just under nine months from the notice—to clear the bar on their own or move. For the ones weighing the network route, ASN's Oct. 1 Form ADV is a public example of what aggregated assets look like on paper, 150-plus firms and $10.6 billion on a single document. The filings that follow will show how much of that scale is real.