Service Provider Fee Analysis

The charges investors pay for asset servicing and custody services are covered in this category. They will be benchmarked against the Thomas Murray IDS universe of custody fees and other related services. The emphasis is focused on total costs regardless of whether the services are carried out in-house, by the custodian, or by other third parties. This avoids the difficulties of comparing ‘bundle discounts’ and cross-subsidies on these services.

 

Custody Fees vs Segregated Assets Under Custody

 

Key metrics

  • Safekeeping and transaction fees as a proportion of segregated assets under custody.
  • Performance measurement, investment accounting, compliance, and other charges all expressed as proportions of total (segregated & pooled) assets.

Benefits

  • Enables a full understanding of the implied cost of an investor’s custody and asset servicing arrangements through a peer group comparison.
  • Establishes whether an investor is getting value from ‘added value’ services.
  • Provides a peer benchmark to be used in negotiating better rates from an investor’s service provider.
  • Examines the cost advantages (or otherwise) of outsourcing vs. retaining functions in-house.

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