Schwab Adjusts Advisor Network Minimums, Signals Focus on Higher-Net-Worth Clients

Schwab Recalibrates Advisor Referral Program Minimums

Charles Schwab (NYSE: SCHW) is implementing a significant change to its Schwab Advisor Network (SAN) referral program, effective January 2026. The brokerage will increase the minimum investable assets required for clients to qualify for referrals to third-party registered investment advisors (RIAs) from $500,000 to $2 million. This adjustment represents a 300% increase in the minimum threshold and is poised to reshape client acquisition strategies within the independent advisory ecosystem.

Strategic Rationale and Program Evolution

This strategic pivot by Schwab aligns with a broader initiative under CEO Rick Wurster to cultivate an upmarket wealth management business. By raising the minimum, Schwab aims to "better align client referrals with the asset levels and specialized needs that are served through the SAN program," according to a company spokeswoman. This move suggests Schwab's intent to concentrate its internal resources on clients with investable assets below the $2 million mark, effectively self-referring these accounts to its in-house branch consultants and wealth managers.

The SAN program, established in 2002, has historically been a significant source of client leads for the approximately 170 RIA firms participating. Earlier in 2025, Schwab also increased the fees paid by participating RIAs for referrals by 5%, marking the first such change in nearly two decades. The current fee structure involves charging slightly more than 26 basis points on the first $2 million in referred client assets, with decreasing rates for higher asset tiers, charged perpetually for referred clients.

Implications for the Independent Advisory Landscape

Industry experts are characterizing this shift as "seismic" for many RIAs. Tim Welsh, president of Nexus Strategy and a former Schwab Advisor Services executive, estimates that the change could reduce referral flows for RIAs by "at least 50% or more," given that the historical average Schwab referral typically fell within the $1 million to $2 million range. Peter Mallouk, CEO of Creative Planning, echoed this sentiment, describing it as a "seismic shift" for participating Schwab RIAs, particularly those heavily reliant on Schwab-generated leads.

For RIAs that have built practices catering to clients in the $500,000 to $2 million range, this policy adjustment will necessitate a rethinking of growth strategies and a potential exploration of alternative referral sources. Conversely, larger RIAs already focused on high-net-worth clients may experience improved lead quality, as Schwab emphasizes delivering more targeted prospects. This move positions Schwab to retain a larger segment of mass affluent clients within its internal advisory options or digital wealth services, while curating a more exclusive network for its independent partners.

Broader Market Context and Outlook

Schwab's decision could set a new industry benchmark for defining "qualified" referrals, particularly as wealth concentration continues to grow. While competing custodians like Fidelity and Pershing also operate referral programs, Schwab's SAN is renowned for its scale and historical success. The updated requirements for both clients and RIAs — where eligible firms typically oversee at least $250 million in assets under management and operate on a fee-only basis — underscore Schwab's commitment to deepening relationships with established, sophisticated advisory firms.

Looking ahead, this strategic refinement suggests a continued evolution in the wealth management sector towards clearer client segmentation and specialized service models. RIAs will need to diversify their business development efforts beyond custodial referral programs, focusing on organic marketing, strategic alliances, and direct client engagement. For Schwab, this move is anticipated to optimize profitability per client by concentrating on higher-net-worth relationships, although it may reduce the overall volume of referred clients to the independent channel.