Charles Schwab is planning another significant increase to the minimum account size for Schwab Advisor Network, or SAN, a program that refers clients to third-party registered investment advisors who use Schwab as a custodian. Beginning next year, Schwab will only refer clients with $5 million or more in investible assets, up from the current level of $2 million.

A Schwab spokeswoman confirms the increase, which will take effect Jan. 5, 2027, and says it comes as increasingly wealthy clients are taking advantage of the program. More than half of the net new asset flows into the program today come from clients with at least $10 million in investible assets, the spokeswoman says.

"The Schwab Advisor Network has evolved significantly since its launch more than 20 years ago, and this change reflects where the program is already headed," she says. "Increasing the referral minimum to $5 million aligns the program with where it is seeing the strongest growth and how clients are engaging with it today."

Advisors see the SAN as a valuable source of client referrals and pay to participate in the program. Schwab last year hiked the SAN fees assessed to advisors by 5%.

Although Schwab offers its own wealth management services to retail customers, it also serves as the largest custodian to independent RIAs in the U.S. In that capacity, it safeguards client assets on behalf of the RIAs and provides them with some technology necessary for their practices.

This will be the second time in about a year that Schwab has increased the account minimum fee for the SAN program. Earlier this year, the minimum account size jumped from $500,000 to $2 million.

Aside from charging advisors to participate in the SAN, Schwab maintains eligibility requirements that screen out smaller and less experienced advisors. Schwab requires SAN advisors to work under a predominantly fee-based compensation model, to have 10 years of experience, and to hold certain securities licenses or a professional designation such as the Certified Financial Planner or chartered financial analyst credential. Advisors also must generally manage at least $500 million in client assets to participate in the program.

Schwab "remains deeply committed to the independent advisor community" and the SAN program, the spokeswoman says, describing it as a crucial element of how the firm cares for high-net-worth clients. "We will continue investing in SAN as an important part of how we help connect clients with specialized advice and independent fiduciary guidance," she says.

Write to advisor.editors@barrons.com