Providers
Custody has been consolidating for years and the pace has picked up. None of it is sinister. All of it changes the questions an advisor should be asking.
Custody has been consolidating for years, and the pace has picked up. Platforms that serve advisors are being bought by larger institutions — asset managers among them — and the stated reason is almost always the same: scale, technology, and widening access to advice.
None of that is sinister. All of it changes the questions an advisor should be asking.
Who owns you now, and what else do they sell? A custodian owned by an asset manager has an interest in what sits in your client accounts that a neutral one does not. This does not make anyone dishonest. It makes the incentive different, and you are entitled to ask how it is handled.
Can my clients be marketed to? Several custodians also serve investors directly. Ask plainly what happens if one of your clients approaches them, and get the answer in writing rather than in a meeting.
What is committed, and for how long? Pricing, service model, and named contacts all survive an acquisition on paper and frequently not in practice. Ask what is contractual and what is intention.
You can change reporting software over a weekend. Changing custody means repapering every account and asking every client to sign something.
Advisors who have done it describe the same things: weeks of an operations person's life, a rejection rate that grinds, and at least one client call that stays with you — the long-standing relationship asking, gently, whether something is wrong with the firm.
That asymmetry is the whole point. It is why custodians can be acquired and keep their books, and it is why the diligence belongs at the front.
Do not move on the announcement. Very little changes in the first year, and a move made on speculation costs your clients real disruption for a risk that may not arrive.
Do not assume it will be fine either. Put a note in your file now about what you would need to see to reconsider — a pricing change, a service change, a change in how your clients are approached. A trigger written in advance is worth more than a reaction later.
Anything that ties your operating model to a single custodian converts every future custody decision into a repapering decision. A firm that can run the same way across several custodians keeps the choice open; a firm that cannot has already made it.
Running one book across several custodians →
Questions this did not answer? Ask them directly — that is what the twenty minutes is for.
Schedule a call to see for yourself