RIA Custody: Building Connectivity for Growth

The RIA custody landscape is experiencing significant transformation, driven by technological advances, evolving advisor needs, and rising end-client expectations. Custody services traditionally focused on basic functions—safekeeping assets and executing trades—but have evolved over the past 15 years into a comprehensive business model for serving advisory firms. 

This evolution represents a fundamental shift in how custodians support advisors and their clients. Technology and service have become intertwined pillars of modern custody offerings, with established players and new entrants bringing unique approaches to these areas. The Schwab-TD Ameritrade merger exemplifies this transformation. It combines the strengths of two major RIA custody providers. Despite the grumblings of former TDA associates and certain RIAs, the successful combination has created a custodial powerhouse. 

In a similar vein, Robinhood's acquisition of TradePMR mirrors TD Ameritrade's early custodial origins and will introduce another disruptive force to the industry, particularly with TDA veterans like Steve Quirk involved. For RIAs, these changes present opportunities and challenges. The expanding range of custody options allows firms to better align their custodial relationships with strategic objectives. However, a more sophisticated evaluation of potential partners is required, with service quality and advisor communication remaining critical factors to custodial success.

Key questions discussed in this report: 

• What are the current and future states of RIA custody? 
• What strategy considerations are critical for custodians to remain relevant? 
• What are the business model implications for custodians and RIAs as the digital landscape evolves?

Companies Mentioned: 

Advyzon, Altruist, Apex Fintech Solutions, BNY Mellon Pershing, Broadridge, Canoe Intelligence, Creative Planning, eMoney, Fidelity Investments, Goldman Sachs Advisor Solutions, JP Morgan, LPL Financial, NewEdge Capital Group, OpenYield, Pontera, PureFacts, RBC, Robinhood, Salesforce, Schwab, SEI, Shareholders Service Group, Snowflake, State Street Corporation, Steward Partners, Summit Financial, TradePMR, Vestwell, Wealthbox, Wells Fargo, WisdomTree