Choosing the right custodian solution can be a complex decision for advisors, as highlighted in a new report.
Whether to be strictly single custodian, juggling several, or clearing and holding assets directly, it may feel that the perfect solution is elusive.
New research from F2 Strategy surveyed firms managing approximately $49.9 trillion in assets and reveals that advisors using multiple custodians are weary of the workflow complexity, while single-custodian firms admit the friction of switching clients keeps them up at night.
It concludes that the industry needs a seamless way to pivot between custodians and makes asset transfers and account transitions painless for everyone.
“Having a way to easily move between custodians benefits both custodians, who could gather more assets faster, and advisors, who wouldn’t have to disrupt their clients so much,” said Doug Fritz, F2 Strategy co-founder and executive chairman.
The report identifies several trends that are keeping the industry stuck:
1. Custodial inertia is real
Two-thirds of firms cling to multiple custodians not out of strategy but fear—fear of disrupting clients during a transfer. The result: added complexity with no clear upside
What advisors should do: Think defensively. Analyze your custody setup rigorously and don’t rule out self-clearing as your firm scales.
2. Satisfaction is stagnant despite more options
Firms in 2025 tapped into ten custodians on average, compared to seven in 2023. Yet satisfaction barely budged. Self-clearing models continued to lead with ratings around 4.3 out of 5.
What advisors should ask: Are custodians comfortable with “good enough”? How can we incentivize them toward smoother transfers or should we consider third-party solutions?
3. APIs need to step up, but are lagging
Despite the growing complexity of custody models, API consistency across platforms remains a pain point. Big RIAs have the tech horsepower—but smaller firms don’t, especially when custodians add surcharges for API access.
What advisors should consider: Demand or co-develop an API that can automate asset transfer setup, because streamlining this process benefits all custody models.
4. AI is winning and blockchain is still waiting in the wings
AI has more momentum in custody transformation with blockchain still considered niche or slower to deliver.
Nine-month electronic trading freeze and share lending program at the center of dismissed claim.
Meanwhile, Rossby Financial's leadership buildout rolls on with a new COO appointment as Balefire Wealth welcomes a distinguished retirement specialist to its national network.
With a smaller group of companies driving stock market performance, advisors must work more intentionally to manage concentration risks within client portfolios.
Professional athletes are often targets of scam artists and are particularly vulnerable to fraud.
The brokerage giant tells Wall Street it will use artificial intelligence to reach clients it has never been able to serve — and turn the technology's perceived threat into a competitive edge.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
