Though industry consolidation has stifled some of BNY Mellon Pershing’s clearing business, the custodian is bringing in new assets, particularly from RIAs.
The clearing firm, which custodies for both broker-dealers and RIAs, drew in $28 billion of net new assets in the last quarter, BNY Mellon CEO Todd Gibbons said on the company’s earnings call Jan. 20.
“The pipeline continues to be very strong, especially in the advisory space,” Gibbons said, noting that the RIA side of the business is growing faster than its broker-dealer side.
However, Pershing has also lost some business as some firms begin to self-clear, or some clients were purchased by firms that custody elsewhere, Gibbons said.
“That’s going to be a little bit of a drag for Pershing for this year,” he noted.
In recent months, M&T Bank moved its $20 billion retail business to LPL Financial from Pershing. Another loss to Pershing last year was LPL’s purchase of Waddell & Reed’s $63 billion wealth management assets.
Despite this, BNY Mellon is evidently still bullish on its financial advisor custody business, which services 1,100 broker-dealers and standalone RIAs.
Transaction volume and the influx of new assets helped boost the company’s performance this quarter, Gibbons said on the earnings call. The custodian is also a “very attractive and efficient” distribution platform for BNY Mellon’s Asset Servicing clients, he said.
“Through Pershing, asset managers have placed $1 trillion of their product and continue to value this unique opportunity that only we can offer,” he said.
A Pershing spokeswoman declined to comment.
Pershing recently began encouraging financial advisors to use BNY Mellon ETFs through an incentive in one of its new pricing models. It also lowered its asset minimum for RIA clients to $100 million last year.
In the previous quarter, the custodian gathered $12 billion in net new assets.
Pershing custodies assets for approximately 700 RIAs, 500 of which are unaffiliated with a broker-dealer, according to the company.