The Future Projections of Custody Services

It is commonly regarded that the custody industry has changed little since the advent of the new millennium. It is widely perceived as a commoditized service with limited scope for innovation.But some experts sense that custody like securities custody services has changed much in recent years and expect such changes to accelerate in future. They believe that custody will evolve continuously.

The focus will shift from current value-added activities and traditional functions to new areas such as knowledge provision, liquidity management, risk management, client service, and data management.

They make the following predictions for custody by 2025, which may or may not happen:

  • Custody responsibilities will be divided into servicing and processing. Processing will be commoditized and have low margin. It will not be limited to custodians and could be handled by industry utilities or specialist providers.

  • Operational process in the complete investment chain will change. In place of every party maintaining their own static data, it will be stored in a central repository. This may even exceed static data.

  • No longer will exist artificial dichotomy between direct custody and global custody. Custody will be offered based on ‘one book of records’.

  • Handling of queries will mostly be automated making use of digital tools such as robotics and API’s (Application Programming Interfaces). Clients will gain direct access to on the ground teams for local support, apart from automated query handling.

  • Custodians will function as a consolidated data source for all classes of assets and even for digital identities, digital keys as well as cryptocurrencies.

  • Custodians will serve as data consolidators, using information feeds from various sources.

  • Custody management will ensure that through digital integration, clients can gain live access to their data at any time, in a mode which permits integration with internal core processes.

  • The custodians will also protect clients from cyber threats. No longer will asset safety be only about safekeeping. It will also include data protection against cybercrimes.

  • Pricing will be determined on basis of services and activities provided, such as for charging data and will be closely linked to associated liabilities and risks.

  • Custodians will be providers of knowledge to clients, exploiting local insight as well as connections with markets and industries.

These are all some aspects about custody projected in future especially 2025.

How to Select a Wealth Management Firm?

You may have been active in making investments for a long time but now want to delegate the responsibility to a professional. Your solution is a wealth management firm. But before you select one among private wealth management firms, ensure you have selected a professional or firm that cares genuinely about your future.

Here are some tips to choose the right wealth management firm:

  • Don’t Fixate on Price

When you are making a selection about wealth management advisor, it is easy to evaluate companies on basis of one criterion- price. This is pretty straightforward and simple, and you cannot ignore number crunching. But experts recommend that you must not get fixated on price but focus on value. After all,the price is what you pay, and value is what you gain. Instead of price, consult some other clients about their experience with the advisor. Ask the advisor what is their definition of an ideal client. In case this definition does not match your ideas and goals, it is likely that the relationship will not work.

  • Do Verify Credentials

For selecting affirm sit down with the actual person who will handle your account. Ask this person for credentials: where they have worked before, whether they are accredited as Certified Financial Planner (CFP) and other qualifications. Do diligent work before hiring an advisor by researching certifications and credentials.

  • Mode of Payment

There are numerous ways to pay your CFP. Some charge a fixed rate based on portfolio size and some charge commission on products you buy from them. The key fact is that you must choose someone who is equally interested in the growth of your portfolio as you are.

Avoid dealing with someone who earns a commission on what they sell to you; they will be more concerned in garnering that extra money instead of ensuring that they sell you what best fits your need.

Final Word

Selecting the best among wealth management companies for your portfolio may be one of the most crucial decisions you will ever make. The fate of your retirement income may depend on who you choose. But there is no need to be petrified about this decision, only keep in mind that there are different kinds of companies. Avoid an impulsive decision; search for references and do some in-depth research of your own.