How to choose the best RIA custodian

investmentnews.com:

In your profession, RIA custodians remain an invaluable partner. They assume the massive responsibility of maintaining the assets and holdings of your RIA firm. They can be federal or state-chartered banks, trust companies, broker-dealers, etc. But regardless of what type of entity they are, RIA custodians must be independent, and prevent RIAs from abusing or misusing client funds. 

Whether you are an individual RIA or work for an RIA firm as an Investment Advisor Representative, one of the most important decisions you will make is choosing your RIA custodian. In this article, we talk about what you should look for in an RIA custodian. With this information as a guide, you can then make informed decisions and choose the most suitable custodian.  

RIA custodians are financial entities that maintain the funds and securities of RIA clients. They are independent of the RIA that hires them, and they must place client funds or securities in individual accounts. The accounts may be under the client’s name or the name of the advisor who serves as the client’s agent or trustee.  

RIAs must meet certain reporting requirements when working with a custodian. Under SEC rules, that includes: 

The institutions that can serve as qualified RIA custodians are determined by the SEC, and includes the following:  

Regardless of the type of entity, RIA custodians primarily do trades, but some custodians may also offer specialized services like bookkeeping. RIA custodians often work exclusively with advisory firms, but it’s not uncommon for them to work directly with individual investors.  

Working with the best RIA custodian for you is crucial to running your business. Knowing the key criteria and comparing custodians can help you find the