How Fidelity’s Threshold Announcement Creates Opportunity for Small RIAs

Fidelity’s decision to extend its $100 million custody minimum to existing RIA clients means many smaller advisory firms will need to make a decision about their future that may not have previously been on their radars. While the announcement created real uncertainty, it also created an opportunity. Firm owners who might never have considered a holistic look at their business now have a natural reason to do so.

When assessing a long-term solution, it’s important to consider which option best positions the firm, its clients, its assets, and the team for the future. For some firms, the answer may be a new custodian. For others, it may be a merger, a partnership with a larger RIA, or a long-planned succession that might be right in this moment.

A Forced Change Is Also a Natural Decision Point

Changing custodians is no small task. Client accounts must be repapered, workflows and integrations rebuilt, and every client walked through the process. That effort can consume months of time and attention, resources that could otherwise be spent creating an entity or considering a move that can create much more longevity and growth potential.

When a transition is unavoidable, such as with the upcoming June 2027 Fidelity deadline, it makes sense to evaluate succession, partnership, and growth options before moving a single account.

Partnering With a Larger RIA

For some firms, the Fidelity announcement may be the right moment to partner with a larger RIA that already uses Fidelity or a highly compatible custodial and technology platform. A well-matched partnership may allow an advisor to maintain much of what makes the firm successful, including client relationships and service philosophy, while gaining the scale, infrastructure, and resources of a larger organization.

Structuring the transition around compatible custody and technology can also keep operations moving smoothly. If the partner firm already meets Fidelity’s minimum, clients may be able to stay on a familiar platform rather than moving their accounts at all.

Weighing the Full Range of Options

Every firm’s situation is different, and the right path depends on the owner’s goals, timeline, and stage of career. Broadly, affected firms may consider:

• Consolidating or growing assets to meet Fidelity’s minimum
• Affiliating with a larger firm or network
• Merging with a compatible RIA
• Selling the practice, potentially as part of a longer-term succession plan
• Remaining independent and moving to a new custodian

Each option carries different economics, long-term value implications, and consequences for clients and employees. An owner within a few years of retirement may weigh these choices very differently than one planning to build for the decades ahead.

How FP Transitions Can Help

FP Transitions has spent decades helping independent financial advisors identify, grow, and realize the equity value of the business they’ve built. For firms affected by Fidelity’s change, FP Transitions can help owners:

• Evaluate strategic options before making a custodial decision
• Connect remaining independent advisors with affiliation, partnership, merger, or sale opportunities
• Identify larger RIAs that may be a strong fit based on custody, technology, business model, culture, and client experience
• Understand the economics and long-term value of each alternative
• Structure a transaction or partnership designed to protect clients, employees, and the value the owner has built
• Develop a transition strategy intended to minimize disruption to the practice

An introductory call with our consultant team is a great way to start considering what a potential next best step is for your business.