I’ve now attended two major financial conferences in the last three weeks and I’ve got another two or three to go this year. In the last two, pricing in the custody world was a major discussion point and I have no doubt that it will be for the forthcoming events. The custody world has many price models but the most prevalent is the ‘bundled fee’ which assesses fees to a custodian based on the assets under management (AUM) using a basis point calculator. Now that model is certainly easy to understand. However, I would have expected that there was some sophistication going on in the background to make sure that the simple end fee has some relationship to the cost of delivering the underlying platform of services and the profit target of the firms concerned.
Courtesy of Ross McGill/ TConsult Ltd
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