According to InvestmentNews, as custodians prepare to roll out new referral programs for registered investment advisers (RIAs), existing platforms like Fidelity's Wealth Advisor Solutions (WAS) and Schwab's Advisor Network continue to influence RIA merger and acquisition decisions. For many firms, gaining access to those referral pipelines is becoming a key driver in dealmaking.

Fidelity's WAS program and Schwab's Advisor Network dominate the referral space, according to InvestmentNews. Schwab recently raised its fees for the first time in nearly two decades, now charging over 26 basis points on the first $2 million in referred client assets. Mega RIAs such as Mercer and Creative Planning participate in both networks, according to their ADV filings.

New research from DeVoe & Company shows that growth—not succession or liquidity—is the top reason RIAs choose to sell. As a result, access to referral programs has become a material consideration in deal structuring and valuation.

Still, not all firms see long-term referral fees as sustainable. Chuck Failla, CEO of Sovereign Financial Group, which manages around $880 million, told InvestmentNews that he would consider participating in the referral programs only if custodians capped their referral fees.

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