There is a growing sentiment in the registered investment advisor space that the vendors may be becoming the competition.
Vanguard’s agreement to purchase custodian and wealth technology firm Altruist is a case in point. In August, the deal by one of the world’s largest asset managers raised the specter that it could use the custody and clearing platform to further its own financial advice offerings, similar to legacy custody/advice players Charles Schwab and Fidelity Investments. But to a panel of registered investment advisor CEOs, the matchup is being seen as a positive driver for those very vendors to modernize their RIA services.
“This is a Trojan Horse moment,” said Shannon Spotswood, CEO of RFG Advisory, during the Wealth Management Industry Awards Executive Sessions CEO panel in New York City on Thursday. “There have been artificial barriers that have made it difficult to move assets from one firm to another, one custodian to another—that game is over. We are moving to straight digital account onboarding.”
Spotswood said clients now expect faster, more personalized service that Vanguard’s scale, combined with Altruist’s technology, will aim to deliver, forcing legacy players like Schwab, Fidelity and even BNY Pershing to elevate their service.
“It’s going to be a trickle-down effect, but it’s going to turn into an avalanche,” she said.
Mike LaMena, CEO of Wealthspire, said Altruist’s sale to Vanguard further reduces the number of “pure play” solutions left in the wealth management market, with asset managers buying technology platforms and wirehouses buying asset managers. In principle, he said, these matchups can work to the favor of RIAs.
“Time will tell what they’re able to deliver, but more resources behind someone who is building innovatively, I think, accrues to the benefit of the industry,” he said.
Rick Kent, the CEO of Merit Financial, proposed that Vanguard and Altruist might seek to one day create a referral program like those of Schwab and Fidelity.
“If you think about that would be a great business to be in,” Kent said. “How about I share my client with you at a 25% to 30% in perpetuity? I don’t need to do anything after I hand you this client, I don’t have any overhead, I don’t have any cost, and if you operate your RIA efficiently, it’s a good business to go into.”
Kent said Merit, which has grown to $30.1 billion in client assets, had been successfully participating in Fidelity’s RIA referral program since it joined in April 2025, as an organic growth channel, and that his firm is in active talks with Schwab to join its program as well.
Schwab has been tightening the funnel for client referrals over the past two years, most recently raising the client asset minimum for referrals to $5 million, effective on Jan. 5, as it seeks to serve clients through its own advisory channel. Kent said Schwab’s desire to work with more wealth clients is not scaring Merit away from working with them.
“I recommend they got into this business because it’s the best business to be in,” Kent quipped. “So, I can’t blame them for that. But with your partners in the industry, you figure out how to work with them as you grow, and you also want to be reciprocal back—a good partnership is a two-way street; I benefit from them, they benefit from us.”
Spotswood, whose RFG has grown in recent years to nearly $9 billion in client assets, said she sees a “bull market” for financial advice that will last at least the next decade, and that it should be “no surprise to anyone in this room” that Schwab wants to work with those clients, especially those with higher net worth.
On the plus side, she said, is that “there is more than enough opportunity with 67% of the assets still in the wirehouse space. As far as delivering independent advice, we’re in a good spot.”
At the same time, Spotswood said she doesn’t want to think about Schwab and others as a “partner,” but rather an “exceptional vendor.”
“Opening up the APIs, allowing us to control the data, allowing us to really build upon the expertise that has been developed in the industry, that to me is at the very top of the food chain of what we are looking for,” she said.
LaMena, whose $600 billion Wealthspire broke free from global risk manager Aon last year under the ownership of Madison Dearborn Partners, said “co-opetition” has long been part of the financial advice space, with Schwab and others competing for Wealthspire clients even though the RIA also works with these vendors.
He said Schwab seeking to work with higher-net-worth clients is “good news,” because those are the clients Wealthspire is best at working with.
“The reality is that if you embrace the fact that there is cooperation and competition, and you are open and transparent, the market is moving in our direction,” he said. “We are fortunate to operate in the fastest-growing segment in the market. … There’s more than enough opportunity for everybody. The clearer you are on the clients you are going after I think the easier it is to navigate some of their changes.”