A financial institution that holds client securities for safekeeping to minimize the risk of their theft or loss, and typically provides other services such as account administration, transaction settlements, collection of dividend and interest payments, tax reporting, and statement generation.


Most independent wealth management firms use the custodial services of one or more custodial firms. Financial Plan has retained the services of Pershing due to their competence, technology, insurance coverage, and low trading charges.

Some wealth managers choose to keep the custody of securities “in-house”. These firms create their own statements. The lack of a third-party custodian to verify the accounting is problematic to security-conscious account holders. The spectre of Bernie Madoff, who kept custody of his client’s assets and generated fraudulent statements, comes to mind.