\n Schwab executives say it will help RIAs target their ideal clientele, but competing custodians like Altruist argue the move ultimately ‘helps Schwab in its long-term effort to displace independent advisors.’\n <\/p>\n
Executives from Schwab Advisor Services defended its fee hike and increased asset minimum requirement<\/a> for RIAs using its client referral program, suggesting its asset increase to $2 million allows advisors to give more focus to their preferred larger clients.<\/p>\n \u201cWe raised the fee share between us and the advisor by 5% for the first time in 20 years. I think we’re still behind the inflation curve on that one. The minimum was $500,000, that’s where we launched it 20 years ago. Again, we’re behind the curve on the inflationary effect,\u201d Jon Beatty, pictured, head of Advisor Services, said Thursday at the Schwab Impact conference in Denver. \u201cMost advisory firms have a $1 million, even a $2 or $3 million minimum. In a lot of ways, they were doing us a favor in serving these smaller households so we right size that in the marketplace,\u201d added Beatty.\u00a0<\/p>\n Schwab\u2019s client referral program, called Schwab Advisor Network (SAN), announced its 5% fee increase<\/a> for participating RIAs in February. The company is also upping the minimum in required assets per client to $2 million from $500,000, shrinking the pool of clients for advisors to work with. That new minimum is set to go into effect in January 2026.<\/p>\n \u201cMany of them were actually thankful it allowed them to focus on the ideal clients that they like to focus on,\u201d Brad Losson, Schwab\u2019s head of enterprise solutions, said on SAN\u2019s asset minimum increase. \u201cIt hasn’t really changed our relationship with any advisor participating in the program, so it kind of went over almost as a non issue to a positive for those that participate.\u201d<\/p>\n About 140 RIA participated in Schwab\u2019s referral program as of the first quarter of this year. Among those firms is the California-based RIA Halbert Hargrove, which manages about $3.5 billion in assets and participates in Fidelity\u2019s WAS referral program in addition to Schwab\u2019s SAN.<\/p>\n \u201cThe increase in client asset minimums is a positive for our firm. It aligns us with clients who we believe are a better fit for our business, and the higher minimums are better suited to the types of services and offerings we provide our clients,\u201d Kelli Kiemle, managing director of growth and client experience at Halbert Hargrove, said in a statement to InvestmentNews.<\/p>\n By raising asset minimums on its RIA client referral program, Schwab can effectively expand its in-house investment services to clients under $2 million.\u00a0<\/p>\n \u201cWe have about 70% coverage of our million dollar plus clients in our retail channel over the years that has actually slipped to a place of uncomfortableness for us. And so this is actually an investment to get back to where we used to be in terms of our coverage,” Beatty said Thursday.<\/p>\n