Why Pershing lowered its RIA asset threshold to $100M

BNY Mellon Pershing used to only service RIAs with at least $250 million in assets.

No longer.

The fourth largest custodian in terms of RIA assets — started welcoming fee-based firms with only $100 million in assets this year, according to Christina Townsend, head of relationship management, consulting and platform strategy at the custodian.

“We're not as focused on the assets,” Townsend says, noting the firm is prioritizing growth-oriented RIAs, regardless of the clients they serve or current size.

The change officially took place at the end of last year, according to a spokeswoman, who said the firm has seen “steady traction” for the segment during this year, declining to specify the number of RIAs this size who had joined.

Pershing’s new minimum is a notable shift for the custodian, which has historically serviced RIAs with higher AUM.

The firm’s RIA division, now 15 years old, now looks to expand its reach.

“We decided to take everything we had done — which was arguably to deal with the highest levels of sophistication and complexity — and now scale,” Townsend says.

Pershing’s asset minimum decrease comes as Charles Schwab nears its anticipated purchase of rival TD Ameritrade. In the wake of the deal, small advisors have expressed concern over service levels and competitors see an opportunity for new business.

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To appeal to “emerging RIAs,” Pershing is building out integrations with fintech companies servicing smaller RIAs, including Advyzon, Townsend says. An Advyzon spokesman confirmed they were working on an integration.

“Emerging RIAs’ needs are very different, and what they can pay for technology is very different,” Townsend says.

To communicate with advisors more effectively the custodian has restructured its relationship management division, she says.

Townsend recently established a leadership team of four direct reports, two relationship managers, a tech strategy and integration manager and a business and technology consulting manager.

“This was a big deal,” Townsend says. Before the change, relationship managers had also been responsible for consulting. Now, experts specializing in areas such as technology or practice management will “be deployed where necessary.”

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Additionally, the firm has standardized its loan application process by creating an application portal online. The custodian is assigning private bankers to handle all RIA client lending needs, so advisors can have a single point of contact to handle borrowing like non-purpose loans or investment lines of credit.

Pershing integrated with alternative investing sponsors CAIS and iCapital Network earlier this month. It added two new pricing models in March.

Pershing housed assets for more than 700 RIAs at the end of the second quarter, according to the custodian.