Let's face it: The custody and clearing business isn't exciting to most advisors. Execution of trades is regarded as an invisible utility. Advisors just want it to work, no mistakes. Ever. And for many reps, they never really have to learn anything much about the process.
But for those who are off on their own or who run broker/dealers, there is plenty to worry about. Ten years ago, there were roughly 130 firms that performed custody/clearing functions; now there are only about 25. Further, the biggest players have gotten far bigger, and most are aligned with a bank or securities firm. Analysts and clearing executives alike expect further consolidation, both among the top-ranked firms, who likely will continue to devour each other, as well as among smaller firms, which are tempting targets for larger clearing firms looking to keep their business growing.
Yet, interestingly, there are some upstart custody/clearing firms who are winning business from the behemoths.