Asset management is your responsibility as a registered investment advisor (RIA). However, a custodian is necessary to ensure the security of client funds. With RIA custodial services, you have a safe and dependable place to store and manage your clients’ money. In this article, we’ll go over five ways in which your company might profit from using RIA custodial services.
Ways Your Business Benefits From RIA Custodial Services
- Streamlined Account Management
One of the significant benefits of using RIA custodial services is that it streamlines your account management process. RIA custodians offer an integrated platform that allows you to manage your clients’ accounts efficiently. All your financial data, from accounts to transactions to reports, is conveniently located in one spot. With a custodian, you do not need to manage multiple accounts with various financial institutions, saving you time and effort.
- Increased Security
Financial advisors (RIAs) have a fiduciary responsibility to put their customers’ interests ahead of their own. RIA custodial services provide an added layer of security to ensure that your client’s assets are safe and secure. Custodians employ strict security measures to protect against fraud, theft, and unauthorized access. They also provide insurance policies to safeguard your clients’ property during a disaster or theft.
- Simplified Compliance
As an RIA, you are subject to various regulatory requirements. RIA custodial services can help simplify compliance by providing tools and resources to help you meet these obligations. Custodians can assist with regulatory filings, compliance monitoring, and record-keeping. In addition, they can link you up with compliance gurus who can assist you make sense of tangled rules and regulations.
- Enhanced Client Service
RIA custodial services can help you provide enhanced client service by offering a range of tools and resources. Custodians offer online account access, allowing clients to view their account information, track performance, and review statements. Some custodians also offer mobile apps that enable your clients to manage their accounts on the go. By providing your clients with these tools, you can improve their overall experience and increase client satisfaction.
- Increased Scalability
You need a platform that can accommodate your expanding RIA custody business. Custodial services for registered investment advisors (RIAs) are adaptable and scalable to match your evolving company demands. Custodians can support various accounts, including retirement, trust, and brokerage accounts. Account consolidation, portfolio management, and detailed reports are just some of the time-saving services they provide their clients.
Things to Know Before Using RIA Custodial Services
Before you decide to use RIA custodial services, there are some things you should know. Here are a few key considerations to keep in mind:
- Custodial Fees
Custodians typically charge fees for their services, which can vary depending on the custodian and the services provided. Ensure you know the whole cost and any potential extra charges. Make sure you’re getting fair pricing on custodial services by shopping around.
- Account Minimums
Some custodians require a minimum account balance to use their services. Find out the requirements for opening an account and if they mesh with your company’s needs. Search for custodians with lower account minimums if you’re just getting started.
- Account Access
Make sure you have access to your client’s accounts at all times. Ensure the custodian provides convenient online account access and a straightforward interface for managing your finances.
- Investment Options
Not all custodians offer the same investment options; some can limit the kinds of investments or financial resources you can employ. Make sure the custodian offers the investment options your clients want.
Tips for Working with RIA Custodial Services
Once you have selected an RIA custodial service, here are some tips for working effectively with them:
- Communication
Effective communication is key to a successful relationship with your custodian. Keep them informed of changes to your business, client needs, or investment strategies. Stay in touch regularly to ensure that any issues are addressed promptly.
- Understanding of Services
Make sure you understand the services provided by your custodian. Ask questions if anything is unclear or if you need additional information. Custodians should be transparent about their services and pricing.
- Regular Reviews
Review your custodial services regularly to ensure they are meeting your needs. Check that you are getting the expected level of service and compare the custodial fees with other providers to ensure you are getting a competitive rate.
- Utilize Tools and Resources
Custodians offer a range of tools and resources to help you manage your clients’ assets more effectively. Take advantage of these resources, such as portfolio management tools, reporting tools, and compliance resources. They can help you save time and streamline your operations.
- Develop a Contingency Plan
A backup plan should be in place just in case something goes wrong. Create a strategy for handling any service interruptions or other potential problems. Make sure your clients understand the strategy and that it addresses their needs.
Conclusion
RIA custodial services offer significant benefits to your business. They provide a streamlined platform for managing your clients’ accounts, enhancing security, simplifying compliance, improving client service, and increasing scalability. By using a custodian, you can focus on managing your clients’ assets and growing your business without the burden of managing multiple accounts with various financial institutions. With the support of an RIA custodian, you can provide your clients with a secure, reliable, and efficient platform for managing their assets.