For individuals and families whose wealth is becoming increasingly global, a custodian with the right resources, expertise, and coverage to help with any multijurisdictional investments is crucial.
The global custody industry is undergoing profound changes for the better to meet the needs of families and individuals whose wealth is not constrained by borders and single markets. Such changes entail stronger investor protections, greater transparency in fee structure, new technologies, and addressing client demands for more risk awareness and real-time data.
However, service agility could count for little if the custodian is limited by its global reach or ability to hold assets around the world. Obviously, this is a significant factor when clients with international asset needs seek a custodian to work with. But even if an end-clients requirements are predominantly domestic in nature, we believe the influence of international events on multiple asset classes demands a custodian with global expertise.
The benefits of working with a global custodian include access to a large number of countries around the world, by using either their proprietary network or creating relationships with top tier third-party local banks, allowing clients to consolidate assets globally.
It is imperative that a global custodian has a well-placed sub-custodian network to support clients local market needs around the world, using either its own local branches or other local custodian banks [agent banks] with whom it contracts to be in its network in each market to hold client accounts. A growing appetite for higher returns via an asset base in fast growing emerging markets, especially in the wake of macroeconomic headwinds created by the COVID-19 pandemic in developed markets, adds weight to such a way of thinking.
But, even if a custodian has the right access and coverage for an individual or familys needs, it is important that it can aggregate this information effectively so that potential cross-border or multi-regional challenges or opportunities may be identified.
In your quest for the right global custodian, consider the following:
- Does your current provider offer you the network of global sub-custodians needed to satisfy your global investments?
- Does your custodian have a large proprietary network in various markets, enabling them to be competitive with fees?
- Does your custodian support your foreign exchange requirements? If you are risk averse for the currency, can it provide solutions i.e. auto repatriate back to your base currency?
- Will your global assets held in custody be held on a bank or broker dealer platform?
For global investors, the right custodian can be a key partner in executing your objectives and maximizing opportunities,
With $23.7 trillion in assets under custody and administration, and a global custody network spanning 100+ foreign markets 63 of which are Citi branches or affiliates, Citi is one of the largest institutional custodians in the world.
To further learn what service options and scalability you should seek in a global custodian, please read our recently published whitepaper.