What’s happening
- Starting in 2026 Charles Schwab will raise the minimum client‑asset level required for a referral through its Schwab Advisor Network (SAN) from $500,000 to $2 million.
- The change is part of a broader effort to position the SAN program as a channel for higher‑net‑worth investors, while keeping mass‑affluent clients inside Schwab’s own in‑house wealth‑management platform (Schwab Private Client Services).
Why Schwab is doing this
| Reason | Explanation |
|---|---|
| Clearer segmentation | By moving the referral threshold upward, Schwab draws a sharper line between the “mass‑affluent” segment (served internally) and the “ultra‑affluent” segment (served by independent RIAs). This reduces overlap between Schwab’s own advisory business and the external advisors it refers to. |
| Higher‑quality pipeline | Advisors in the SAN program receive a steady flow of prospects who already hold a substantial amount of assets, improving the economics of the referral relationship (the fee is a small % of assets). |
| Revenue protection | As more assets stay within Schwab’s own wealth‑management suite, the firm retains more advisory fees and cross‑selling opportunities (e.g., banking, brokerage, retirement accounts). |
| Strategic focus on organic growth | With fewer low‑balance referrals, Schwab encourages RIAs to grow organically—through existing client relationships, new acquisition strategies, and deeper service offerings—rather than relying heavily on Schwab‑driven pipelines. |
Implications for Registered Investment Advisors (RIAs)
- Refine your target market – Focus on prospects who already exceed the $2 M threshold or who are likely to reach it soon. Emphasize sophisticated wealth‑management services (tax planning, estate strategy, alternative investments) that justify higher asset levels.
- Strengthen organic channels – Invest in client‑referral programs, digital marketing, and thought‑leadership content to attract high‑net‑worth individuals without relying on Schwab referrals.
- Re‑evaluate SAN participation – If your firm’s average client size is below $2 M, the cost‑benefit of staying in the SAN program diminishes. Consider exiting or negotiating a different arrangement.
- Leverage Schwab’s internal platform – For clients below the new threshold, you might still refer them to Schwab’s in‑house wealth service and earn a modest fee, but the upside is limited compared with high‑balance referrals.
- Adjust fee structures – Since SAN fees are based on a small percentage of referred assets (0.25 % on the first $2 M), you may need to offset reduced referral volume with higher advisory fees or performance‑based compensation for existing clients.
What this means for the broader market
- Consolidation pressure – Larger RIAs with $250 M+ AUM (the minimum to join SAN initially) will benefit most, potentially accelerating consolidation among boutique firms seeking scale.
- Competitive advantage for Schwab – By keeping the bulk of mass‑affluent assets in‑house, Schwab can deepen its cross‑sell of banking, lending, and brokerage products, reinforcing its position as the nation’s biggest custodian for RIAs.
- Potential fee hikes – Industry chatter suggests Schwab may also revisit the 0.25 % referral fee after a decade of stagnation, further incentivizing RIAs to shift away from the program if costs rise.
Bottom‑line advice for advisors
- Audit your client mix now: identify how many current or prospective clients sit near or above the $2 M mark.
- Develop a high‑net‑worth acquisition plan that doesn’t rely on Schwab referrals (e.g., targeted events, partnerships with CPAs/lawyers, LinkedIn outreach).
- Monitor Schwab communications closely for any additional changes (e.g., fee adjustments, new eligibility criteria).
By proactively adapting to Schwab’s threshold increase, RIAs can protect their referral pipeline, capture higher‑value business, and position themselves for sustainable, organic growth.Previous message