Rivals court the small RIAs Fidelity's $100 million custody minimum will push out by June 2027

Betterment's waiver ends on a calendar date, so what it is worth depends on the month an advisor arrives ^[3]. A firm that moves on the first of November gets about 26 months free. One that arrives at Fidelity's June 30, 2027 cutoff gets 18 ^[2][14]. If Betterment's 2027 tiers are marginal, a hypothetical $50 million firm would pay $20,000 on its first $10 million and $48,000 on the other $40 million, or $68,000 a year ^[5][15]. The eight months between those two start dates are worth about $45,000 to that firm ^[16].

A firm that holds out until June 2027 to compare bids gives up eight of those 26 months ^[14]. The offer only requires adding Betterment as a custodian, so a firm can move part of its book ^[3]. "For some firms, we are the sole custodian, and for others, we are the home for their next generation clients," Betterment CEO Sarah Levy wrote ^[12].

The other bids are thinner on paper. "At Axos, we have all the capabilities to be able to support these advisors," Mike Watson, head of Axos Securities, wrote ^[7]. Schwab is contacting prospects directly ^[13], and its head of advisor services, Jon Beatty, wrote that "Small RIAs are the backbone of the independent advisory profession, and they always have been" ^[9]. The report does not give fee terms from either firm, or a count of the Fidelity firms under the line. A small firm has the most leverage with the custodian that needs its assets. Put more precisely, it has the most leverage where it moves the totals: ten $50 million firms would add about 1% to Axos's custody assets ^[18] and less than a hundredth of a percent to Schwab's RIA book ^[19].

The deadline could play out in different ways. If enough advisors hold out, rivals may sweeten their terms as June 2027 nears, and waiting pays. If the posted offers stand, every month of delay costs waiver. The line itself may also move: Tim Welsh, founder of Nexus Strategy, wrote in a white paper that the threshold is just the beginning and could be raised by Fidelity and potentially others ^[20]. I'd expect the posted terms to hold, because Betterment tied both its opt-in deadline and its waiver to fixed dates ^[3]. That view is wrong if Schwab or Axos publish fee terms richer than Betterment's before the cutoff.

Every Fidelity move on small firms has gone the same way. More than ten years ago it charged firms under $15 million $2,500 a quarter, or $10,000 a year, and more recently it stopped letting new firms under $100 million join ^[10][17]. A decade ago it priced small firms. This time it is removing existing ones ^[1]. A Fidelity spokesperson wrote: "We continue to invest in our clients by focusing on the service, technology, products, insights, and consulting that we believe only Fidelity can deliver" ^[11].