Transitioning to a New Custodian: CG Advisory Services’ Move to Axos Advisor Services

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CG Advisory Services (CGAS), a registered investment advisor managing $3.1 billion in client assets, is making a significant shift in its custody platform. The firm has decided to move away from Charles Schwab and instead opt for Axos Advisor Services.

According to Tony Mazzali, CEO of CGAS, while the firm will retain some assets on Schwab’s platform, they have already started transitioning funds over to Axos. Mazzali expects the process to be completed by the end of the year.

Mazzali explains that this transition will allow CGAS to better understand where Schwab fits into their strategy as it continues to evolve. However, Schwab declined to comment on this development.

This move reflects a growing trend among RIA firms who are either switching or adding custodians, moving beyond the incumbents that have traditionally dominated the space. With Schwab’s acquisition of TD Ameritrade, some industry leaders see an opportunity to diversify their custodial partnerships and expand the range of firms responsible for holding clients’ funds.

One such industry leader is Creative Planning CEO Peter Mallouk. He recently discussed his firm’s decision to add Goldman Sachs as a new custodian, noting that Goldman’s platform would be well-suited for their high-net-worth clients.

CGAS is also adopting a multicustodial approach. While LPL Financial remains their primary custodian, the firm intends to use Axos for their affluent clients. Additionally, CGAS is actively evaluating other potential custodians as they pursue what Mazzali refers to as a “client segmentation approach.”

Mazzali encourages other advisors to look beyond the traditional custodial matrix and do their homework in finding a custodian that not only meets their clients’ needs but also supports their firm’s vision for growth.

As CGAS makes this transition, it marks an important step in their strategic evolution, providing them with the opportunity to explore new possibilities and build relationships with custodians that align with their long-term goals.

The Changing Landscape of the Custodian Industry

The custodian industry has always been marked by consolidation, and recent data from research firm Cerulli Associates confirms this trend. According to their report, four major firms – Schwab, Fidelity, BNY Mellon’s Pershing, and LPL Financial – dominate the market with a whopping 84% share of all RIA assets.

In light of this, CGAS, a long-time custodial client of TD Ameritrade, recently made the decision to part ways with them. The deteriorating relationship between the two firms began when TD Ameritrade was acquired by Schwab. CGAS founder, Mr. Mazzali, explains that the decision to leave Schwab was rooted in the misalignment of cultures and strategies.

After careful consideration, CGAS found a new custodian partner in Axos. With $25 billion in custodial assets and a team comprised of former TD executives in senior positions, Axos proved to be a better fit for CGAS in terms of shared cultural values. Mazzali notes that Axos’ leadership demonstrated not only a willingness to adapt to industry shifts but also a genuine desire to collaborate as partners.

Apart from cultural compatibility, Axos’ advanced technology and robust banking tools served as major selling points for CGAS. Following the successful transition, the firm plans to gradually move its high-net-worth clients to Axos while exploring additional partnerships with other potential custodians.

Mazzali emphasizes that adopting a multicustodial approach will enable CGAS to better serve their clients. While CGAS greatly valued TD’s culture and service during their long-standing association, this transition has presented an opportunity for the firm to reassess its approach moving forward.

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