As high-priority clients, large RIA firms typically get a great deal of personal attention from custodians. That’s the good news. However, as many RIAs know, even with this personal attention, there are at times deficiencies in the overall custodial experience that make servicing clients a challenge.

Some of the biggest issues noted are related to product availability and technology limitations. Therefore, if you notice significant shortcomings and decide to explore other options, due diligence surrounding these topics is important to ensure a new custodian can deliver what you are looking for in these areas.

The following questions can help fuel discussions between RIAs and potential custodians. They address common areas of deficiency and can help you determine if a custodian’s offerings meet your needs.

Discussion topic: Products

Why is discussing a custodian’s product offerings important? To be able to meet the diverse demands of your clients, you need to offer a variety of products. Large RIAs frequently work with clients that have a high net worth, meaning they may want to take advantage of products that aren’t widely accessible. Alternative investments and banking solutions such as jumbo loans and portfolio-based mortgages, SBLOC products are just a couple of examples. Some custodians are flexible and willing to work with RIAs to make these types of products available. Other custodians will either send new product requests through a lengthy approval process, or they’ll simply deny them outright. Asking the following questions can help RIAs determine if a custodian is flexible and nimble enough to entertain product requests outside of normal offerings.

Questions to ask custodians:

  1. What investment products do you offer, and is there flexibility if I need access to products for my clients that you don’t currently provide?
  2. What is your stance on alternative investments?
  3. Do you offer banking solutions for consumers, and if so, what banking products do you provide access to that I can make available to clients?
  4. Do you offer banking solutions such as merger and acquisition lending for RIAs that my business can potentially utilize?

Discussion topic: Technology

Why is asking questions about a custodian’s technology important?There is no doubt that your custodian’s technology affects your ability to service clients. When searching for a new custodian, technology can be a key differentiator between prospects. For example, most custodians will offer similar technology features, such as an open architecture platform. However, some custodians go beyond these standard features. One example is offering a digital advice platform that RIAs can add their branding to and make available to clients. Solutions like this that fill a need and help RIAs stand out from competitors are valuable and less common.

Questions to ask custodians:

  1. Do you have an open-architecture platform that integrates with third-party technologies?
  2. What technology training and support can I expect to receive during onboarding and long term?
  3. Do you have technology solutions — such as a digital advice platform — that I can brand as my own and enable my investors to use?
  4. Does your technology enable clients to log in and access their accounts, loans, and investments on a single dashboard?

To learn more about the custodial experience Axos Clearing offers, schedule a free consultation.