As the RIA landscape continues to evolve, understanding custodian preferences is key for advisors and industry observers alike.

Our latest market share analysis shows that Charles Schwab leads as the top RIA custodian across all RIA AUM tiers, from small firms to those managing over $1 billion in assets. While Schwab remains the dominant player, newer custodians like Altruist are making significant inroads, particularly among smaller and tech-focused RIAs.

In this post, we break down the latest trends in custodian adoption, the impact of the TD Ameritrade and Schwab merger, and how diversification strategies are shaping the future of RIA operations.

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Schwab Leads Across All RIA Sizes‍

Our market share analysis reveals that Charles Schwab leads across all RIA AUM tiers, from the smallest to RIAs with over $1 billion in assets. While Schwab is the largest custodian, there are interesting differences in the top players across each tier. Our analysis considers the number of clients and advisors, as well as firm size, and shows that newer custodians like Altruist, a tech-focused startup, are gaining traction among smaller RIAs.

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Altruist is on the Rise‍

The fastest growing custodians are measured by logo growth, which represents the number of new RIA firms acquired as clients. The custodians in this list accounted for nearly 70% of all custodial changes or additions made within the one-year period.

As of Q1 2024, Charles Schwab remains at the top, although most of this growth comes from firms transitioning from TD Ameritrade. If it weren't for this merger, the numbers would be more in line with the rest of the list you see here.

A standout on this list is Altruist, a newer, tech-focused custodian on the rise. Altruist has experienced remarkable growth over the past few years, emerging as a top choice for many new RIAs seeking a custodian partner. Its popularity surge is a testament to the fact that new RIAs value innovative solutions and exceptional service, making Altruist an attractive option for forward-thinking RIAs.

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Custodian Preferences of New RIAs

Newly formed RIAs tend to choose Charles Schwab as their custodian, with a 50% or higher likelihood. This is likely due to the administrative ease of sticking with a familiar custodian, especially when bringing over clients and assets from a previous firm.

The data suggests that Schwab may continue to grow as new RIAs emerge and existing ones expand. This trend could be a leading indicator of which custodians will be the biggest players in the future, as the preferences of new RIAs may shape the market share of custodians over time.

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‍Fidelity Remains a Core Alternative to Schwab

Fidelity continues to be one of the most established custodians serving RIAs, particularly among mid-sized and larger firms that prioritize institutional-grade infrastructure and service depth. Many RIAs choose Fidelity for its balance sheet strength, brand recognition, and breadth of investment products.

Fidelity is often viewed as a strong alternative or complement to Schwab, especially in multi-custodian strategies. Firms seeking robust trading capabilities, lending solutions, and access to proprietary research frequently consider Fidelity a stable, long-term partner. In recent custodian shifts, Fidelity has also been a primary beneficiary of firms reevaluating their platform relationships following industry consolidation.

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TD Ameritrade’s Legacy Still Influences Custodian Decisions

Although TD Ameritrade has now been fully integrated into Schwab, its legacy platform continues to influence how RIAs think about custodian selection. For years, TD Ameritrade Institutional was known for advisor-friendly service, strong technology integrations, and flexibility for growing firms.

Some RIAs that valued the TD Ameritrade experience have sought custodians that replicate elements of its service model, platform openness, or advisor support structure. The transition period also prompted certain firms to reassess their custodian strategy entirely, accelerating diversification or encouraging evaluation of newer custodial entrants.

Even as the brand consolidates under Schwab, the competitive ripple effects of the merger are still shaping custodian preferences.

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Interactive Brokers Attracts Cost-Conscious and Globally Oriented RIAs

Interactive Brokers has carved out a distinct position in the RIA custodian market, particularly among firms focused on cost efficiency, global trading access, and sophisticated investment strategies.

RIAs drawn to Interactive Brokers often prioritize:

• Competitive pricing and margin rates
• Broad international market access
• Advanced trading tools and technology infrastructure

While not traditionally viewed as a mainstream RIA custodian in the same tier as Schwab or Fidelity, Interactive Brokers appeals to firms with specialized investment approaches, higher trading frequency, or globally diversified client bases.

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Other Custodian Options in the RIA Market

Beyond the largest custodians, several additional platforms play meaningful roles in the RIA ecosystem:

• Pershing: Pershing serves RIAs seeking enterprise-grade clearing capabilities and flexible platform solutions, often appealing to larger or more operationally complex firms.
• LPL Financial: LPL operates across both broker-dealer and RIA custody models, making it attractive to hybrid advisors and firms that value integrated brokerage and advisory infrastructure.
• SEI: SEI is often selected by RIAs focused on outsourced investment management, turnkey asset management programs (TAMPs), and operational efficiency.
• Raymond James: Raymond James supports both independent and employee advisor models, offering custodial solutions that appeal to advisors seeking a balance between independence and firm-level support.

Custodian Diversification: A Growing Trend Among RIAs ‍

Most RIAs still only have one custodian, but many RIAs choose to add some diversification to their roster. With the TD Ameritrade and Schwab merger, some RIAs have added a second custodian, and new families are being brought on board with a different custodian.

This strategy allows RIAs to keep legacy clients on their existing custodian while moving forward with a new one. While it may be a hassle to repaper, it's a long-term strategy that custodians are likely to adopt to see the rewards.

As the data shows, the number of RIAs with multiple custodians is significant, and this trend is expected to continue.

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Common Custodian Combinations: Schwab’s on top, Altruist Emerges‍

Over 70% of Registered Investment Advisors (RIAs) have one of the most common custodian combinations, with Schwab being the most popular, followed by combinations with TD Ameritrade. Interestingly, Altruist is emerging as a popular combination with Schwab, potentially due to the forced migration from TD Ameritrade.

This trend may indicate that RIAs are looking for better servicing and fees, and may eventually migrate to newer custodians. As the market continues to evolve, it will be interesting to see how these combinations change over time.

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TD Ameritrade to Schwab Transition: A Successful Merger‍

Analyzing the impact of the TD Ameritrade and Schwab merger reveals a successful transition. Just over a year ago, 5,500 RIAs still listed TD as their custodian. Fast-forwarding to today, 80% of those RIAs now list Schwab as their custodian, with 20% still listing TD. Notably, only 2.3% have completely transitioned away from TD, indicating a significant retention rate for Schwab. This merger can be considered a big win for Schwab, with 9.7 out of 10 clients retained.

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Where Did the 2.3% Go? New Custodian Preferences Emerge‍

Among the 2.3% of RIAs that transitioned away from TD Ameritrade, a new distribution of custodian preferences emerged. Fidelity saw a significant gain, with many RIAs opting for the Fidelity-Schwab combination. Altruist took second place, indicating a growing popularity. Also, Assetmark was recently acquired by Private Equity, which may impact its future growth and influence in the market.

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The Largest RIA Custodians Continue to Shape the Market

The custodian landscape for RIAs continues to evolve, with Charles Schwab maintaining its leadership across all firm sizes while innovative players like Altruist gain traction among newer and tech-focused RIAs. Trends such as custodian diversification, strategic mergers like TD Ameritrade with Schwab, and emerging combinations highlight how RIAs are adapting to meet client needs and optimize their operations.

Understanding these shifts is essential for advisors seeking to make informed decisions and stay ahead in a competitive market. For a closer look at the leading independent RIAs leveraging these custodian strategies, check out our Top Independent RIAs ranking.

Advisors looking to uncover emerging opportunities, track custodian trends, and connect with high-value RIA clients can leverage AdvizorPro’s platform to gain actionable insights. Start your free trial today and see how our data-driven tools can help grow your business.

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