Why Schwab Raised Asset Minimums on ‘Fly Paper’ Referral Program

Double or nothing.

Advisors grow their business through referral programs that give them access to prospective clients who can bring significant assets to their firms. The programs can be especially pivotal for smaller RIAs. However, Charles Schwab recently raised the entry point for its Schwab Advisor Network, literally doubling it to $500 million. While it was unwelcome news for many advisors hoping to get in, some advisors said the move was inevitable, and will force firms to focus on growing organically.

“It essentially victimizes many of the smaller firms that came to them in good faith,” said securities lawyer Bill Singer. “But those victims were frankly foolish because they knowingly flew into the fly paper.”

Get with the Program

The number of participating firms in SAN is not fixed and depends on Schwab’s retail clients’ needs, a spokesperson said in an email. Participation typically ranges from 100 to 150 RIAs, and the higher AUM minimum has not affected that number or the firms already in the program. This isn’t the only change to SAN, though:

• Schwab is also raising the client asset minimum to $2 million, up from $500,000 starting in 2026. 
• RIAs pay ongoing asset-based fees, which Schwab increased 5% earlier this year, ranging from about 26 basis points on the first $2 million to 10.5 basis points above $10 million.

Some see Schwab’s move as just making official what was already standard. “Raising the minimum was making explicit a screen they have always had in place, which is to find large, well established firms that are not going to disappear,” said George Chang, founder of Pillar Point Wealth Management.

Little Chuck. The changes could be a way to keep more mass-affluent clients in-house. “It’s an interesting development because either it’s going to engineer all these little guys out of business, or it’s going to create an opportunity for the next young Charles Schwab out there to create a firm that will cater to these RIAs,” Singer told Advisor Upside.