Betterment Advisor Solutions is waiving its platform fee through Dec. 31, 2028, for RIAs that custody with Fidelity Investments and add Betterment as a custodian. The offer arrives as Fidelity moves to require existing RIA clients to keep at least $100 million in custody assets on its platform.
To qualify, firms must be new to Betterment, with no funded client accounts on its advisor platform as of Oct. 6, 2026, and must opt in through Betterment’s advisor sales team by June 30, 2027. That is the same date Fidelity has given RIAs below its threshold to meet the minimum or end their custodial relationship.
Betterment’s platform fee generally runs from 0.12% to 0.20% a year, depending on a firm’s aggregate client balances. The waiver does not cover underlying fund expenses. Betterment Advisor Solutions, which has no account minimums as a custodian to RIAs, says it works with more than 600 advisory firms. Betterment overall manages $70 billion in assets, according to the company. Most of those assets come from the firm's robo-advisor investment app.
The offer's terms also require advisors to tell clients, before starting any transfer, that the fee waiver gives them an incentive to move assets to Betterment.
“RIAs of every size deserve a custodial partner that supports where they are today and where they want to go. Betterment is built to support firms at any size, and our job is to enable their efficient growth. For some firms we are the sole custodian and for others we are the home for their next generation clients,” Betterment CEO Sarah Levy said in a statement.
FINTRX, a wealth management data provider, identified 986 independent RIAs with less than $100 million at Fidelity, holding a combined $37.2 billion on the platform.
Of those firms, 706, or 72%, could not reach the threshold even by consolidating assets from other custodians onto Fidelity, FINTRX found. Another 354, or 36%, use Fidelity as their only custodian. Some 337 affected firms, or 34%, manage more than $100 million in total assets, and 71 firms, or 7%, sit within $10 million of the minimum.
A Fidelity spokesperson said the actual number of advisors it custodies under $100 million is a "few hundred firms," according to WealthManagement.com. "FINTRX stands behind the data, which comes from publicly available Form ADVs filed by registered investment advisors," a spokesperson wrote to WM.com. "FINTRX removed the post from its website until they receive clarification from Fidelity."
A PR representative for FINTRX told InvestmentNews Thursday that "nothing has changed" regarding its findings, which InvestmentNews viewed over email. "FINTRX looked at all firms classified as independent RIAs that have less than $100 million custodied with Fidelity. Some only custody with Fidelity, and others use additional custodians," added the representative.
Betterment is not the only platform pursuing smaller advisors. Altruist, which recently added donor-advised funds with no minimums, has built its custody business around the same market as it now enters ownership under Vanguard. Schwab's RIA custody unit serves more than 11,000 firms under $100M in AUM, its executive Jon Beatty wrote in a LinkedIn post after Fidelity's minimum increase.
Joe Kuschman, a Certified Financial Planner and former financial advisor at Domain Money, said Betterment’s retail business could give some advisors pause, even as Betterment intends for its retail app to serve as a pipeline for RIA client referrals.
“I can tell you Betterment has a shockingly solid offering. They are trying to lure startup advisors away from Altruist as well. The main issue with Betterment is that they also offer a direct to consumer robo advisor product,” Kuschman said. “So while I do see some Fidelity folks exploring Betterment, there are most likely more compelling offers elsewhere.”
Philip Waxelbaum, CEO of recruiting firm Masada Consulting, sees Fidelity’s minimum as a defensive move against competing custodians, including Vanguard's Altruist.
"Most of the RIAs affected apply multiple custodians. They can well accommodate the Fidelity standard. By setting a higher bar the ability for new players [such as] Altruist, etc, from getting a trial look-see is stymied," said Waxelbaum."There are many pleasurable experiences for RIAs, IARs and clients. Full repapering is not one of them."
He expects other custody incumbents to follow. Schwab has already announced another increase this year to its asset minimum for clients to be referred to RIAs.
“Don’t be surprised to see Schwab to follow on. It is a smart leadership tactic.” Waxelbaum said. “I think the triopoly of CS [Charles Schwab], Fidelity and Pershing will take the offensive in stopping any further attacks on their dominant market share.”
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