Custody of Assets - Avoiding Bernie Madoff Situations! - Episode 12
Listen to Episode 12 Here:
What Is a Custodian?
What Does a Custodian Do?
An Advantage of Being an Independent RIA
One advantage of being my own independent RIA is I get to choose the best tech out there, and I can switch if something nicer comes along as opposed to being stuck in whatever the current platforms are being used at those firms that have a shop on every corner or some 100-year-old bank or brokerage firm.
The checks and balances between RIAs and custodians are key to whomever you choose to use as an advisor.
Bernie Madoff Scandal
Downsides of Large Firms
This way you can usually get better service and enjoy improved safety of your assets.
The reason, of course, is that many people feel safer keeping their assets at a very large firm that they have heard of, rather than a smaller financial planning firm, even if that smaller firm often provides more customized service and has renounced predatory sales activities and commissions [by being a fiduciary firm like mine (shameless plug)].
The thing is, the large firms with the stadium naming rights, and fancy ivory towers and all their grandfathered money may be a false comfort; the funds may actually be safer with the smaller planning firm than with the larger multinational firm that may or may not buy Super Bowl advertisements
I hope this helped clear up any questions about where your money actually goes when you work with an RIA like my firm.