Betterment, Axos and Schwab court Fidelity clients hit by $100 million minimum

Fidelity Investments had already stopped admitting advisory firms with less than $100 million in client assets as new custody clients. Last week it told the sub-$100 million firms already on the platform to reach that number, or shift some or all of their assets elsewhere, by June 2027, and within days, according to WealthManagement.com, the custodians that want those accounts started calling.

Betterment went furthest on price, waiving its platform fee through the end of 2028 for advisors who join its RIA custody platform, the only dated concession in the report, while Axos Advisor Services, sized there at $48 billion in custody assets, has its sales team working what it calls every advisor who custodies with Fidelity, a target set wider than the sub-$100 million population the minimum touches. Schwab is pinging potential clients directly, and Altruist chief executive Jason Wenk, who the report says recently agreed to sell his once-independent custodial platform to Vanguard, is making his case to advisors on LinkedIn.

Schwab's counter-offer is arithmetic. Its custody business holds $5.7 trillion in RIA assets, carries no asset minimum and serves more than 11,000 firms with less than $100 million in AUM, according to the report. "Small RIAs are the backbone of the independent advisory profession," Jon Beatty, Schwab's head of advisor services, wrote after Fidelity's news broke, adding that the job is the same whether an advisor is launching a firm or managing billions.

Fidelity's movement on this has run one direction for a while: more than a decade ago it imposed a $2,500 quarterly fee on firms with under $15 million in client assets on the platform, and more recently it stopped letting sub-$100 million firms in at all. What changed is the population the line applies to. In response to competitors courting its clients, a Fidelity spokesperson said the firm's position in combined clearing and custody remains strong and pointed to continued investment in service, technology, products and consulting.

Consultants are telling advisors not to read $100 million as a destination: several warn on LinkedIn and in commentary that it is an initial cutoff, and Tim Welsh, president and founder of Nexus Strategy, wrote in a white paper that the threshold is just the beginning and could be raised again by Fidelity and potentially by others.

That warning matters because a floor on new entrants and a floor on the existing book are different instruments. The first is a price signal about which relationships a custodian wants to sell into; the second repriced relationships Fidelity itself underwrote years ago, and it tells every advisor on any platform that the arrangement holds only as long as the custodian's view of its own cost to serve. A firm choosing a landing spot in the next few months is choosing a counterparty whose minimum it might one day cross in the wrong direction. Schwab's no-minimum posture and its 11,000 sub-$100 million firms are the answer the report puts front and center, and the bet in moving there is that the posture outlasts the current management of advisor services.

The deadline is already working its way into deal flow. Concurrent announced its first platform purchase and HB Wealth closed a Texas deal this month, as the June 2027 date makes sub-scale firms candidates for sale. Selling is the other way out of a custody relationship that has stopped working: the clients stay, the platform moves to an acquirer that clears the bar, and the principal who wanted to keep building gives up the build. The premium in those transactions now prices integration capacity and post-close operators, which is a poor fit for a firm whose main asset is a book that has to be moved.

The only price term the report states is Betterment's waiver of platform fees through the end of 2028, which leaves an advisor with roughly two years of subsidy and a decision afterward about whether the platform has earned a fee. Betterment's onboarding automation, examined in September, found a firm buying the switch rather than the wait, and the waiver applies the same logic to the price of staying. Vanguard's interest in this channel is not new either: it hired former Barron's editor Beverly Goodman in August to court RIAs, so the report's account of an Altruist sale, presented as agreed rather than completed, points a low-cost asset manager at a custodial platform. The coverage does not say how many firms custodying at Fidelity sit below the line, or how many will move. It establishes a date and a set of buyers for every principal who would rather not spend the months until then proving a number a custodian picked.