Independence
Firms move providers routinely and custodians rarely, entirely because of the friction. Spend the diligence here.
Custody is the hardest arrangement to change later, because changing it means repapering every account and asking every client to sign something. Firms move providers routinely and move custodians rarely, and the reason is entirely that friction.
Spend the diligence here.
Who they accept. Minimums vary and they matter most to the firms with the least leverage. A new firm below a custodian's threshold will hear about it, sometimes politely and sometimes as a significantly worse service tier.
What it costs the client. Transaction charges, account fees, what is free and what is not, and what happens to cash balances. This is the client's money, and the difference across custodians on a cash-heavy book is not trivial.
The service model. A named service team or a general queue. This is the single largest determinant of your daily experience and the hardest thing to establish from a sales conversation.
Technology and access. What your systems can reach, in what form, and how much operational work is created by the answer.
Several custodians also serve investors directly. Ask plainly how that is handled: whether your clients can be marketed to, what happens if a client approaches them, and what is committed in writing rather than described in a meeting.
New firms should generally start with one. Multiple custodians double the operational surface before the firm has the staff to carry it, and the reasons that eventually justify it — an acquisition, a client who will not move — arrive on their own schedule.
How long a new account takes end to end. Who they call when something breaks and whether that person answers. What surprised them in year one. And what they would choose again.
When you end up with more than one →
Questions this did not answer? Ask them directly — that is what the twenty minutes is for.
Schedule a call to see for yourself