Five months after trading com- missionsfor RIAinvestorclients fell to the wayside at Charles
Schwab, TD Ameritrade and later
Fidelity, Pershing jumped into the act
on March 5 with a zero-commission
model tied to a low-yield cash sweep
program and the option for advisor clients to pay at least $25 a month with
fees tiered to assets.
The news came just a day after
Pershing announced that Ben Harrison
will succeed Mark Tibergien as head
of Pershing Advisor Solutions when
Tibergien retires on June 1.
What does the pricing shift mean
for advisors — grappling with Schwab’s
impending purchase of TD Ameritrade
and other disruptive forces, like newbie
Altruist’s entry into the custodial space
“What Pershing has done — at
first glance — is innovative because
it essentially gives advisors more
options,” said John Furey, managing
partner at the consulting firm Advisor
“There’s a flat fee if you want it,
which is a bit different from charg-
ing basis points on assets,” Furey said.
“Advisors will look at this and see
opportunities to use it for some cli-
ents. Pershing is trying to attract large
advisors and large clients [with this
Altruist CEO Jason Wenk, though, is
more skeptical about the attractiveness
of Pershing’s Netflix-like offering. “In
regards to the subscription plan, I can’t
understand why an RIA would find this
desirable,” he said in a Twitter message.
” … changing how they make money
but not changing how much they get;
doesn’t seem like progress to me.”
A TEST FOR SCHWAB?
Meanwhile, to win over TD Ameritrade
RIAs concerned with what the acqui-
sition could mean for them and their
practices, Schwab says it has no asset
minimums, no custody fees and “no
intention to raise them.”
But that pledge could be sorely
tested with Pershing’s move, says Tim
Welsh of Nexus Strategy (and a former
Schwab executive). Before its pricing
announcement, Pershing had no offi-
cial custody fees. “Now, they [have]
explicit fees, with alternative pricing
options,” Welsh said.
Schwab’s pledge “backs [it] into a cor-
ner by removing any ability to maneuver,
Ultimately, Welsh thinks, “It’s
only a matter of time until they break
But Furey isn’t so certain.
In the short term, the consultant sees
this as more of a strategic move on
Pershing’s part than a disruptive one.
“Pricing is just one lever,” he said. RIAs
chose custodians based on a mix of pricing, products and technology.
As for how competitive it makes
RIA LESSONS & LEADERS
By Janet Levaux
Pershing Rolls Out Pricing Options,
Taps Replacement for Tibergien