Steward Partners finds balance by adding Pershing custody alongside Raymond James

Steward Partners Global Advisory is bulking up its new custodial relationship with BNY Mellon Pershing with the addition of Ensign Wealth Partners, the third breakaway team to join Steward since it partnered with Pershing two months ago.

Ensign, a $500 million RIA that came from Wells Fargo, pushes Steward’s total custodial assets on the Pershing platform to more than $1 billion.

The other breakaways that joined Steward over the past two months were the $200 million Valencia Group from UBS, and the $250 million HL Wiginton team, which joined from Cambridge.

Steward's $26 billion in assets areprimarily custodied at Raymond James, but the RIA entered into a custodial relationship with Pershing at the end of January following a casual introduction almost five years earlier.

Steward co-founder and Chief Executive Jim Gold recalls meeting Pershing CEO Jim Crowley at an industry conference when Crowley offered a business card and told Gold to contact him if he was ever looking for another custodian.

“It’s always helpful to have a few business cards in your pocket,” Crowley said, recalling the encounter.

Steward, which made headlines two years ago when it became one of the first RIAs to sign on to Goldman Sachs’ fledgling custody platform, has not altered its custody relationship with Raymond James as part of the new partnership with Pershing.

A spokesperson for Steward confirmed that Steward is currently only using the custody platforms at Raymond James and Pershing.

“We look at Pershing as a core custodial option for us that will sit alongside Raymond James,” Gold said. “We have not moved one dollar away from Raymond James.”

The spark that ignited the multicustodial relationships at Steward was the 2021 acquisition of Umpqua Holdings, which moved Steward into the bank brokerage business.

Until that point, Steward had accessed the Raymond James broker-dealer, but Umpqua, which had $3.4 billion in assets, introduced new options.

“We acquired their wealth management division and broker-dealer, and that allowed us to think about becoming a multicustodial offering,” Gold said.

In terms of managing two custodial partnerships, Steward has so far been spreading the wealth, as illustrated by three breakaway teams combining for roughly $1 billion that linked to the Raymond James platform at the same time the three other teams were joining Pershing.

One thing Pershing and Raymond James have in common is neither company competes with RIAs by offering financial planning services directly to consumers.

In terms of competing with Raymond James for Steward’s custody business, Pershing’s Crowley said that’s the business he’s in.

“I live on the edge of my seat every day to make sure our clients believe in our story and are confident we can deliver,” he said. “When Pershing goes to market as a custodian to RIAs, our ideal prospect is those firms that are growth-minded and professionally managed.”

Pershing, which has a history dating back 85 years and oversees $2 trillion in client assets, has a reputation for catering to larger RIAs.

“If you look at the billion-dollar-plus RIAs, we have a custody relationship with just over 30% of them,” Crowley said.

[More: Custody newbie Altruist claims No. 3 spot with SSG acquisition]