9 ways advisers may have custody without knowing it
Deducting advisory fees is one of the few custody qualifications that does not require an outside audit.
One way to avoid custody status is to invoice a client, and to have the client pay with a check.
An adviser that has custody only because it directly deducts fees does not need to indicate in Item 9.A of Form ADV Part I, that it has custody and is not required to undergo a surprise exam.