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RIA Trend Report 2016: Number of Custody/Clearing Firms

RIA Trend Report 2016: Number of Custody/Clearing Firms

Practice Management & Operations

In contrast to the directional change we observed last year, in 2015 we observe an increase in the percentage of advisors who use only one custodian, at 47% compared to 42% in 2014. Correspondingly, the percentage of advisors reporting that they use two or more custodians decreased slightly, from 55% to 50%. These changes may indicate a trend reversal if we see them continue in future surveys. RIAs that work with multiple custodians continue to indicate that their business simply necessitates different custodians for different needs, whether technology, research or practice management related, and our survey data presented in Figure 7 confirms this. Clients are also influencing the decision to diversify among service providers, with 45% reporting client preference for specific custodians as a reason to work with multiple firms, largely consistent with prior year. One notable increase – to 29% from 22% last year – is service availability as a key driver of the use of more than one custodian. In contrast, investment options are less of a driver of multiple custodial relationships in this year’s responses.

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Next Part 7 of 7: Average Advisors' Written Plans and Procedures

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