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.
Average 401(k) balances jumped 10.5% last quarter and small business retirement plan enrollment kept climbing, according to new Fidelity data.
Colorado-based RIA Summit Wealth Group acquires Portland's Financial Investment Team, expanding to 12 offices in six states.
Osaic and &Partners each land former Commonwealth teams, while Prospera welcomes two East Coast veterans to its network.
Why younger clients are trading parlays for prediction markets and calling it investing
'Einstein of Wall Street' joins Forbes as the brand is shook over its suspended advisor rankings.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
