A custodian protects customers’ assets. Custodians are banks or financial companies. They keep assets safe in electronic or physical form. Custodians charge fees to customers. Fees can be based on assets under management or transactions. Custodians record details on every account. If a custodian goes bankrupt, customers’ assets are protected. Those assets stay separate from the custodian’s assets.
Custodians have expertise to protect assets. They use best practices for security. Their systems are audited and stress-tested. Custodians must be regulated and compliant. This ensures trust. Some crypto custodians only work with companies.
Custodians are only liable for losses from negligence.
A custodian bank holds financial assets for safekeeping to minimize the risk of theft or loss. Investment advisors engage custodians to safeguard clients’ assets. They provide services like settlement of transactions, accounting, recordkeeping and reporting.
While custodians protect assets, they don’t make investment decisions. Custodians may manage assets for minors and incapacitated adults. A fund manager investing assets for investors and a janitor performing maintenance are examples of custodians.
Steps to Become a Custodian:
- Get education.
- Get license if required.
- Apply for jobs.
- Develop skills like cleaning, equipment operation, time management.
Good custodians are orderly, careful, and thorough.
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