BNY Pershing is the latest U.S. custodian to move to create a registered investment advisor referral program.
Ben Harrison, global head of client coverage at BNY Pershing, confirmed the development via email for ThinkAdvisor. The news was first reported earlier this week by FA IQ.
“As the world’s largest custodian, BNY has a unique opportunity to match advisors and investors across our ecosystem,” Harrison said. “We plan to launch BNY Advisor Match later this year — a digital-first referral program that will help BNY Pershing clients scale organic growth through a new channel of qualified leads as more investors seek financial advice.”
Further details about the program are contained in a regulatory filing from Dec. 26. The document shows the program will be operated by a unit within BNY Mellon Advisors (formerly known as Lockwood Advisors) and will involve a $190 billion pool of client assets eligible for referrals.
The document states that investors will need to file a request for a financial advisor through a forthcoming BNY website, which will then connect them with an advisor or potentially a banker.
“You will enter certain profile information through [BNY Mellon Advisors’] online interface for the service, or a [BNY Mellon Advisors] representative will work with you to gather the information such as net worth, marital status, and financial goals,” the filing states.
Referral-seeking clients won’t pay a fee to participate, the filing states. Instead, participating advisors will pay BNY Mellon Advisors an annual $50,000 participation fee and an annual asset-based fee of up to 0.30% of on the value of the assets in a referred client’s accounts opened or maintained on BNY Pershing platforms. There are also potential buyout fees for participating advisors, according to the filing, in cases where their client transfers custody of the assets to a financial institution not affiliated with BNY Advisors.
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