Part 5: Number of Custody/Clearing Firms With Which Advisors WorkPart 5: Number of Custody/Clearing Firms With Which Advisors Work
Section 2: Practice Management and Operations
February 27, 2015
Advisors rely on custodians and clearing firms for a wide range of functions but the number of custodians used varies across the channels. Advisors in the W/R segment differed from their peers in that nearly half report that they do not use custodians or clearing firms at all, likely due to the fact that these larger organizations can deliver these services in-house. Approximately 46% of W/R advisors use one custody firm and very few report using more than one. A greater percentage of advisors in the independent broker dealer channel - approximately 60% - report using only one custodian while the percentage self-clearing or using two custodians falls in the mid-teens. The story is different for advisors in the RIA channel. While 42% of RIAs report using one custodian, over 50% report using two or more. This is a possible result of the recent number of advisors who have started their own RIA firms, as these smaller operations are more likely to require the use of outside custodians and clearing firms.
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Next Part 6 of 7: Reasons Advisors Work with Multiple Custodians
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