Poll results (october 2024)
As an independent wealth manager, I know many aspects are essential when selecting a custodian bank. However, one factor always stands out during the practice selection process. Is it the fees, brand reputation, quality of EAM desk support, or even the bank’s financial stability? Let us know what you focus on first!
Competitive Fees
EAM Desk Support
Financial Stability
Note: We have removed all individuals not working in the EAM industry to ensure the evaluation is relevant to our LinkedIn audience.
What Matters Most to Swiss independent Wealth Managers?
When independent wealth managers select a custodian bank, several vital factors influence their decisions. A recent poll revealed that 70% of wealth managers consider competitive fees the most critical factor. Lower fees can significantly impact client returns, making cost efficiency a crucial consideration in the selection process.
In contrast, 20% of wealth managers prioritise the quality of support from the bank’s External Asset Manager (EAM) desk. For them, having reliable, knowledgeable, and responsive support is essential to smoothly managing day-to-day operations. Vital EAM desk service allows wealth managers to deliver exceptional value and maintain an edge in a competitive market.
Interestingly, only 10% of participants ranked financial stability as their top priority. This indicates that most wealth managers view financial stability as a basic expectation rather than a differentiating factor. They assume that any reputable custodian bank will be financially secure.
When evaluating the critical factors in selecting a custodian bank, it’s clear that wealth managers focus on more than just basic needs. The right partner can offer far-reaching benefits, from fee transparency to tailored EAM support. Understanding these factors allows wealth managers to align their bank choices with their practice’s goals, ensuring long-term success for their business and clients.
Source: LinkedIn Poll
A practical checklist
The poll shows priorities. In practice, a good selection looks at all of the following:
| Criterion | What to ask the bank |
|---|---|
| Fees | Custody fee, brokerage, FX spread, minimum fees per account – in total, not per line |
| EAM desk | Named contacts, response times, cover during holidays, trading cut-off times |
| Onboarding | Typical time to open an account, KYC requirements, digital onboarding |
| Data and reporting | Daily data feed to your portfolio management system, API access, reporting formats |
| Product access | Open architecture: third-party funds, private markets, structured products |
| Credit | Lombard lending, loan-to-value policy, approval speed |
| Stability | Capital ratio (CET1), rating, ownership, strategic commitment to the EAM business |
Hidden costs are the real cost
The headline custody fee is rarely the full story. FX spreads, ticket fees and minimum charges on small accounts can outweigh a low percentage fee. Ask every candidate bank to price the same model portfolio with a realistic number of trades. Only then are offers comparable.
Why most firms use more than one bank
Few independent wealth managers rely on a single custodian. Working with two to four banks gives clients choice of booking centre and reduces concentration risk. It also keeps negotiating power on fees. The price is more operational work, which is why consolidated reporting becomes essential.
Read also: What Wealth Managers Really Expect from a Custodian Bank in Switzerland · Consolidated Wealth Reporting
