Very few people can name the many providers of custodial services to RIA's. We managed to do it. But behind the curtain with each custodian are hidden gems of opportunity for RIAs. The challenge is to find a perfect match for your firm amidst all the noise.
The custody business—and it is a business—is shrinking not growing. The trillion-dollar giants Schwab and TD Ameritrade have teamed up this year to offer RIA's what's a service beyond one's imagination. With fewer players in the mix -- advisors have to ask themselves what's into for them and for their clients. And in year full of unexpected landmines one needs all the information it can get to chose the right partner.
Bigger May Not Be Greater
Beyond size a choice based on size, an RIA needs to begin the conversation to undersatnd their needs and where they need to be 2 years, or 5 years down the road.
Between the boutiques and the behemoths, there aren’t a lot of people with the scale to operate across the board on a cost-effective basis and provide truly customer-centered support. That’s where the service comes in: competition in what would ordinarily be a mid-market bulge bracket is extremely thin.
Factor out the marketing noise it may come down to cost, service and technology that determines your choice.
When we polled Wealth Advisor readers on their favorite RIA custodian, ten firms earned enough votes to make an impact on the results, but the runaway winner was BNY Mellon | Pershing® to take on the giants on something like a head-to-head basis, while beating the boutiques for breadth as well as depth of service. The others have their followings, but tend to veer just a bit too far from the sweet spot in terms of service, platform access to providers Pershing wins the prize.