Axos Discloses Custody Fee Schedule as Smaller Rivals Hilltop, Innovayte Stay Silent

Axos Advisor Services publicly shared its standard custody fee schedule this week, breaking with industry practice as smaller rivals Hilltop Securities and Innovayte declined interviews on their pricing and business models. Axos, a unit of publicly traded Axos Financial, reversed an initial refusal to discuss fees, while Fidelity Investments and BNY Pershing answered questions by email without live interviews. Executives at consulting firm Datos Insights said the silence is structural, reflecting custodians' reliance on cash sweeps, which the SEC flagged in a June risk alert over advisers' undisclosed revenue from client cash balances. Axos bought its custody business from Morgan Stanley in 2021 for $55 million. Assets under custody or administration reached $47.8 billion across 300 clearing and custody clients at the end of the second quarter, up from $23 billion and 200 clients at the time of the deal. Second-quarter net revenue rose more than 350% from the 2020 period to $41.4 million. Hilltop's clearing and custody unit posted $12.4 million in pretax profit on $124 million in net revenue in the second quarter, a 10% margin, and served 93 financial organizations at the end of last year. Innovayte reported $3.4 billion in assets.