BNY Mellon's Pershing is looking to attract independent advisers to its custody business by offering a menu of pricing options that puts it on par with its largest competitors.
The new fee models include a zero-transaction-fee structure and a monthly subscription option. The custodian’s existing variable pricing model will remain available for RIAs who serve clients with complex financial needs, according to a release.
“There is significant disruption in the marketplace, and with disruption comes opportunity,” said Ben Harrison, head of business development and relationship management for Pershing’s RIA custody business. “We’re looking to compete, and we’re focused on being the dominant provider of RIA custody services.”
A feature unique to the subscription model is that BNY’s ETFs are available, and assets invested in them are excluded from the subscription fee calculation, he said.
“This was a strategy designed for advisers with adviser input,” he said. “There has been a thirst for a unique cash solution in the marketplace.”
The updated pricing comes after a pledge from Charles Schwab, in February, to continue to offer no asset minimums and no custody fees to advisers. The announcement appeared to be designed to reassure smaller RIAs at TD Ameritrade that may have been skittish about its pending acquisition by Schwab.
That deal could be approved later this year by the Justice Department, which is currently performing an antitrust review.
“As the only remaining custodian that does not compete with advisers for retail assets, we are setting a standard for transparency and how custodians should engage with advisory firms,” Pershing CEO Jim Crowley said in a statement.
The no-transaction-fee option will appeal to RIAs seeking low costs for client portfolios built primarily with equities and ETFs, according to the announcement. The subscription model begins at $25 per month with tiers of fees set according to assets.
The Pershing move could win over advisers who are keen to leave TD Ameritrade ahead of the acquisition, said Tim Welsh, president of Nexus Strategy, in an email.
“Pershing is making a bold move to unseat Schwab at a very opportunistic time,” Mr. Welsh said. Because Schwab is not imposing custody fees, “their hands are tied as competitors innovate with new pricing options,” he added.
“Pershing is setting themselves up nicely, particularly when it comes to being able to onboard smaller AUM advisers with their new pricing scheme,” Mr. Welsh wrote.
A Schwab spokesman said the company welcomes competition, though the firm could not comment on the specifics of strategy decisions made by other custodians.
"At a general level this is another expression of the dynamic and ever-changing custody landscape," the spokesman said in an email.
Pershing had 726 RIA clients that custodied with the firm as of the end of 2019, representing more than $800 billion in assets, according to the firm.
The news also follows an announcement that longtime Pershing RIA leader Mark Tibergien will retire from the company at the end of May. Succeeding him in that role will be Ben Harrison.
“This is a very smart move for Pershing, given their market position and the changing conversation around cash and cash economics for RIA custodians,” said Brian Shenson, principal at Springboard Advisory Group, in an email. “This ‘subscription fee’ represents the first announced form of a ‘custody fee’ from a major RIA custodian. And while many industry experts anticipated this day would come eventually (much like zero-commission), it is now here and an opportunity for Pershing to show leadership in this space.”
The Illinois order refers to Brandon Ellington’s investment program as a “Ponzi-like scheme.”
But the Amazon executive chair seems to want it both ways, arguing that taxing the ultra-wealthy won't help struggling Americans.
Northern Trust planning leader sees the bill extending qualified charitable distributions to employer plans as a potential positive step — but advisors shouldn't overlook bigger holes in the strategy.
Markets will always create reasons for investors to worry. The advisor’s role is not to predict uncertainty, but to help clients understand why volatility should not derail a well-built financial plan.
Plus, Asset-Map partners with Contio to elevate the advisor meeting experience, and MyVest claims an innovation in portfolio management with separately managed models.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
