Charles Schwab's decision to raise the asset threshold for client referrals to independent advisors is set to reshape how RIAs source new business, according to industry recruiters. The custodian confirmed that the Schwab Advisor Network (SAN) will require clients to have at least $5 million in investable assets to be referred to participating firms, effective Jan. 5, 2027. This marks the second increase in as many years, following a jump from $500,000 to $2 million in 2025.
Chris Bisenius, president of Windward Recruiting, a Wisconsin-based firm that places advisors at RIAs, said the move will reduce the volume of leads flowing to independent firms. “It just reduces the amount of flow. If it reduces the amount of lead going out all over to everybody, then everyone's fighting for less,” he said. Bisenius noted that many RIAs are now exploring alternative referral sources, including digital marketplaces like NerdWallet and SmartAsset, as well as newer custodian programs from Goldman Sachs and TradePMR, which is owned by Robinhood.
The SAN program, which has operated since 2002, competes with Fidelity's Wealth Advisor Solutions (WAS) as one of the largest custodian referral networks for RIAs. Schwab told InvestmentNews in December 2025 that SAN typically includes between 100 and 150 firms. Bisenius suggested that some advisors on both platforms may be shifting more of their referral activity to Fidelity, which he described as “more stable.”
Schwab defended the change, saying it aligns with client demand. “Today, more than half of SAN's net flows come from clients with $10 million or more in investable assets, reflecting growing demand for highly personalized advice and specialized expertise,” a spokesperson said. The company reiterated its commitment to the independent advisor community and to SAN as a key connection point.
The tightening of SAN comes as Schwab expands its own internal advisory capabilities. In a letter published earlier this month, founder Charles Schwab outlined plans to hire “thousands more financial consultants” and open more than 20 million new client accounts over the next five years. Bisenius said many Schwab-employed advisors are feeling pressure from high-volume client interactions, with limited time for deep relationship building.
Gabriel Shahin, CEO of Falcon Wealth Planning, a California-based RIA with roughly $1.92 billion in client assets, said Schwab's strategy is increasingly competitive with its own custodian clients. “They’re looking to dabble in the RIA business. They have pilot branches offering financial planning services,” he said. Shahin warned that this could strain relationships with RIAs who custody assets at Schwab, especially if clients encounter Schwab representatives in branches.
The move also highlights broader trends in the RIA space, including rising competition for referrals and the growing role of alternative custodians. As TradePMR's referral network expands, and with recruiting costs climbing, RIAs are being forced to diversify their growth strategies. Some are also revisiting their use of tax-optimized SMA strategies as custodians adjust their offerings.
Bisenius said the frustration among RIAs is palpable. “A lot of RIAs who see this as a threat, or have had challenges with Schwab already, this forces them to look at others. Do they start looking at SEI? Do they start looking at Goldman? Do they start looking at the lead flow through Robinhood?” he said. He expects more custodians to capitalize on Schwab's move by launching or expanding their own referral programs.
For now, RIAs are left to navigate a tighter referral environment while also competing with Schwab's own growth ambitions. As the Jan. 5, 2027, effective date approaches, advisors will need to weigh the benefits of staying in SAN against the appeal of alternative channels that may offer more consistent lead flow.
