Mercer got roughly half of H1 2026 net new assets from custodian referrals

Mercer Advisors got roughly half of its net new assets in the first half of 2026 through custodian referral programs, according to an S&P Global Ratings report tied to its new credit rating.

Using the channel "requires the company to pay referral fees to the custodian partners," S&P wrote in the Sept. 9 report, which InvestmentNews reported on Oct. 16. The rating agency said Mercer's "high reliance" on those programs "could limit margin expansion," while noting its recent diversification into other channels could help.

The report accompanied the $1.9 billion refinancing Mercer announced the previous week: a $1.65 billion term loan B, a $250 million delayed draw term loan and a $340 million revolver. S&P assigned a "B" issuer credit rating to parent OG Crimson Parent Inc. Mercer expects the new loan's rate, 1.75 percentage points below its prior debt, to save $35 million to $40 million in interest in 2027, InvestmentNews reported. S&P projects adjusted debt to EBITDA above 7x at closing, easing afterward, and interest coverage of 2x-3x in 2027 from slightly below 2x now.

Schwab holds $57.7 billion of Mercer's regulatory assets and Fidelity holds $20.9 billion, according to Mercer's Sept. 17 Form ADV. Those figures measure regulatory assets, not the $111 billion in client assets Mercer reports; together they total $78.6 billion.

Schwab will lift the minimum for client referrals to $5 million from $2 million on Jan. 5, 2027, having already raised it from $500,000. Schwab says more than half of the net flows in its advisor network come from referred clients with $10 million or more in investable assets.

Mercer CEO Dave Welling told InvestmentNews the higher bar sits where his firm already works. "The focus of our efforts with Schwab has more been on the segments where they really need us," he said, adding that the majority of clients Mercer closes through the program were already above $5 million, "if not over $10 [million]." Some advisors have raised concerns that Schwab is competing to keep more clients as its in-house advisor teams grow, InvestmentNews reported.

Fidelity has told custody clients under $100 million they have until June 2027 to move, this publication reported.