Upon first glance, a page on the SEI website that asks financial advisors what they’re “really paying for” from their custodian looks very informative.
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The “outdated or disjointed technology, limited access to service teams, paper statements and tax documents” and “a shrinking experience that no longer aligns with how you want to grow,” mentioned on the firm’s recruiting page certainly could raise advisors’ hackles. Plus, the Oaks, Pennsylvania-based investment management, technology and registered investment advisory services firm’s custody arm, SEI Private Trust Custody, doesn’t engage in the common industry conflicts of interest of payment for order flow or the surcharges known as “markups” on mutual fund transactions.
And its one-page custody fee schedule, the “SEI Wealth Platform Fee Schedule,” includes a “full detail and description” of the costs for advisors working with the firm.
Unfortunately, that fee schedule wasn’t available to visitors on the page this week.
While SEI’s pricing “is intentionally simple and transparent, with a fee schedule that fits on a single page and contains one custody fee plus five ancillary charges,” there “isn’t a separate one-page document available to share,” a spokesperson for the firm said in an email. When asked for the reason that the fee schedule was not available, the spokesperson said that information amounted to the list of expenses and the reference to that one-page document was simply referring to the fact that it fits on a single page.
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SEI
Similar … with one important difference
That disconnect likely won’t come as a surprise to advisors who are familiar with the difficulty of finding the exact prices for clearing and custody services in the industry, or to other readers of Financial Planning’s ongoing series on the fees and business models of custodians. Just as with other players in this part of the wealth management industry, SEI charges rates that are the product of careful, private negotiations with its client RIAs and other advisory practices.
But those costs do differ in one key way from the largest custodians: a custody fee that starts at 0.10% and eliminates nearly every transaction fee.
So it’s no wonder that SEI has drawn a substantial base of 654 advisory firms with $138 billion in assets under custody or administration — even though its name is “not typically on the forefront” as much as giant rivals like Charles Schwab, Fidelity Investments and BNY Pershing, according to Gabriel Garcia, SEI’s head of RIA client strategy and experience. He joined the firm in 2022 with the mission of expanding its footprint among RIAs after tenures at Schwab, Pershing, the large RIA firm Cresset Capital and E-Trade Advisor Services (the custodian once known as Trust Company of America and now called Axos Advisor Services). Many advisors likely know SEI better as a turnkey asset management firm, but it has operated a custody business for more than 30 years.
“We are not in the consideration set as often as we’d like to be,” Garcia said, pointing out that various industry rankings have found that it is the fifth- or sixth-largest custodian in the industry. “We are an end-to-end ecosystem for advisors who want to use it in that fashion.”
And they can find an ever-expanding amount of resources to deploy through SEI, which counts advisors as one of its four core business segments besides investment management firms, institutional investors and private banks. Eight out of the top 20 U.S. banks and 43 out of the top 100 investment managers work with the publicly traded firm in some capacity, and it manages, advises or administers $1.9 trillion in assets across the firm, according to its latest annual report.
Advisors like Sean Ries, the founder of Wexford, Pennsylvania-based Core Wealth Management, cite SEI’s technology, customer service and fund manager menus as advantages to working with the firm. Ries had first learned of SEI with a prior broker-dealer, which allowed him to use the firm’s services to some degree but limited trading there, he noted in an email. He converted to SEI from Pershing when he left that prior brokerage firm for Tampa, Florida-based independent wealth management firm IFP.
The “superior, personalized services” from SEI helps Ries “keep things simple in our office while providing clients complete financial planning needs” through either fee-based or client-directed portals, Ries said.
“Our practice is mainly clients in the retirement and distribution phases of life,” Ries said. “SEI allows for consolidation and simplicity. I have always tried to make things easy for clients to understand. Compared to other platforms, SEI offers many manager options: mutual fund, ETF, individual stock and bond portfolios. SEI also constructs diversified portfolios using these options. Managers are highlighted and ranked on the SEI platform to help with individual advisor portfolio construction. Due to our assets under management with SEI, we have priority access to internal and external reps to assist with service issues or outside-the-box requests. Additionally, SEI recently upgraded the client portal with features like daily performance and the ability to link outside accounts like banking, credit card and investment accounts, so clients can easily follow all of their accounts in one place.”
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SEI
Big recent deals
SEI has been boosting its wealth management client base with an edge from recruiting, M&A deals and collaborations. In the first quarter, The Huntington National Bank picked another unit of SEI as the vendor to unify and enhance the technology, operations and investment management at Huntington Private Bank.
Earlier this year, SEI also secured a deal with IBM to jumpstart its agentic AI across the firm. And, last December, SEI completed the first stage of what will be a transaction worth $544 million, when a holding company paid $441 million to buy a majority stake in Beachwood, Ohio-based Stratos Wealth Holdings, which had 350 advisors and $38 billion in client assets at the time.
Stratos is “deepening SEI’s participation in the advice value chain and strengthening the overall reach and relevance of our platforms,” SEI CEO Ryan Hicke said in prepared remarks on the firm’s first-quarter earnings call with analysts. “We remain committed to disciplined capital deployment that balances reinvestment, M&A and consistent returns of capital to shareholders.”
Other important acquisitions over the years have included cloud-based advisor software firm Oranj in 2021, alternative investment technology company Altigo in 2023 and tax-focused investment tech firm LifeYield in 2024. SEI will roll out tax planning tools later this year stemming from the latter acquisition that enable advisors to reach a rarely achieved level of account consolidation in the industry called a “unified managed household.”
“We think that we come to the table with a broader value proposition,” Garcia said. “We continue to look at things that expand our value to the firms that we serve to ensure that they can serve their clients more effectively.”
And part of that value equation revolves around the custody fee, which usually falls below the starting rate of 0.10% based on the size of the relationship, types of investments and mix of services, he noted. Outside of five particular charges for wire transfers, overdrafts, stop payments, account closing or termination, or special assets, advisory practices and their clients won’t pay SEI any other transaction fees. Like with other firms, though, the exact rate turns into “a little bit of an art and science” in those negotiations with advisors, Garcia said.
“There’s not a quid pro quo of do this or do that,” he said. “There are costs to being a custodian.”
