Know your numbers. Avoid custody pricing surprises.

While custody pricing methodology might seem complex, its underlying principle is universal – your cost corresponds to the services you require. Learn what elements factor into determining your rates in the infographic below.

Tags: Assets, Investments, Custody, Trustee, Securities
Published: April 03, 2019

Enticing pricing is just that, an enticement. When a bid seems too low to be realistic long term, it usually is. And when you don’t anticipate upcoming fee increases to rebalance your ongoing or changing servicing needs, they can often come as a shock.

 

Staying aware of your portfolio’s makeup – knowing the details of its structure and activity – can help you avoid surprises. Learn what factors weigh into your cost and what red flags might signal an approaching change.

 

Custody pricing infographic
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How are pricing structures built?

Knowing what elements weigh into fee structures can help you look at your strategy and make smart decisions for the future. These are the primary factors that determine your cost.


1. Do you need a custodian or a trustee?
This is the most critical aspect of your fee. Trustees require more fiduciary responsibility (reflected in a higher price), custodians require less (reflected in a lower price).

2. What securities are you holding/ do you need serviced?
Are you invested in equities, bonds, real estate? A mutual fund, hedge fund or exchange-traded fund?

3. How many accounts do you need?
Are you a single client with one long-term investment account? Or are you a holding company with multiple subcompanies or wholly owned subsidiaries?

4. Are you involving outside parties?
Do you have outside managers? Do you have outside advisors or consultants authorizing trades on your behalf and communicating with your custodian? Or are you doing all your work inhouse?

5. What level of service do you expect?
Do you require frequent in-person meetings? Reporting customization? Daily confirmations?

Why is my pricing changing?

Knowing what elements weigh into fee structures can help you look at your strategy and make smart decisions for the future. These are the primary factors that determine your cost.

1. A change in investment strategy

2. Acquiring a company

3. A change in asset allocations

4. An initial comparative pricing bid

5. Elevated servicing demands

6. Special customization or vendor involvement

 

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Visit usbank.com/custody to learn more about our custody solutions.

 

 

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