How To Pick A Custodian For Your Registered Investment Adviser
The most important aspect of setting up a registered
investment advisor is selecting the right custodian to hold the assets. A good custodian is a
firm's friend and greatest asset. However, it can also make a new business
difficult to run. Before you can enter a
custodial partnership, it is important to thoroughly screen multiple
custodians. While there are many factors
to consider, there are three essential traits that your custodian should have.
1. Customer Service Is King!
Excellent customer service is the backbone of any
company. A custodian
should provide excellent customer service on both the client and their side. The custodian must be accessible to answer your client's
questions and should be available to them. In an ideal world, your client would call you. However,
clients sometimes get lost and may call the custodian. There are some custodians who will not talk to clients. They won't help a client who is confused and will just
direct them to you. This is bad customer
service that can lead to lost clients. You
should choose a custodian who is available, willing, and able help your client.
Remember that you are the customer when it comes to
service. A custodian
should have a dedicated team or department that is trained specifically for
your firm. The custodian's team will spend
time getting to know your company, its workers, and its processes. The custodian's staff will work with your staff to speed up
turnaround times on new paperwork, withdrawals, minimum distribution request,
and other issues. Your business can
benefit greatly from a custodian who acts as your business partner and helps
solve problems.
2. All aspects of your investment portfolios
can be managed by the Custodian's trading platform.
You have spent countless hours creating your money
management strategy as a new investment advisor. There is nothing worse
than discovering that your custodian doesn't have access to your investments. Make a list of the investments you want to own, and then ask
each custodian whether they have access to those investments. Although it might seem like an essential part of a
custodian’s existence, many custodians do not have certain mutual fund families
or exchange-traded funds. You should
continue interviewing candidates if the custodian doesn't have access to your
investments.
3. The Custodian's Technology Musts to Increase Your Business's Production.
In an effort to attract investment advisers, many
custodians have invested millions in their technology platforms over the last
few years. These
platforms now offer many services and technologies that investment advisors
would have paid for years ago. These
platforms offer many services, including billing, data backup and performance
reporting, compliance monitoring as well as bulk trading, account balance
rebalancing, accounting, CRM and more. Whatever
technology you use, it should be simple to use and easy to implement. This will
increase your firm's productivity. The
custodian must also train your staff how to use the technology. The world's best technology is useless if nobody knows how
to use it.
These are the three essential elements of an investment
advisor's success: customer service, available investments, technology, and
custodial relationships. These three aspects should be part of your relationship with
your custodian. You should move on if a
potential custodian is unable to help you in any of these areas.
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