Investment Operations

RIA Custody: Technology, Innovation, and Strategic Direction

RIAs now have enough flexibility to establish integration hubs around their vendor solutions rather than use a custodian as the primary technology provider, according to the latest Aite Group report. 

Aite Group’s newest report, RIA Custody: Technology, Innovation, and Strategic Direction, reviews U.S. correspondent clearing firms and custodians that are competing with technology vendors and fintech firms to remain relevant to advisors. According to the report, custodians are trying to enhance their value proposition by leveraging data to create predictive models and deliver better business outcomes for RIAs and investors. Custodians are focused on enhancing their economics by helping advisors become larger and more efficient through their use of integrated technologies.

“Custodians need to reinvent themselves, as they are no longer at the center of the advisor relationship,” states Greg O’Gara, senior analyst at Aite Group. “The value proposition of transaction processing is nearly nonexistent, and where custodians fail to provide advisor solutions, vendors are filling the void,” he adds.

This new Impact Report explores the technology and platform development initiatives of key custodial providers Fidelity, BNY Mellon Pershing, Royal Bank of Canada, and TD Ameritrade. The report also highlights other market entrants Apex Clearing, DriveWealth, and Folio Investing. Throughout Q3 and Q4 2018, Aite Group conducted 25 in-depth interviews and extensive platform demonstrations with leading U.S. correspondent clearing firms and RIA custodians to form the basis of this report.

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