Charles Schwab was deemed to have one of the strongest custodian platforms, and TradePMR ranked for the best trading capabilities among 10 peers, according to a new in-depth study performed by The Oasis Group, a wealth management consultant.
The study released on August 27 is the first in a series of research reports, called
The studies aim to give advisors "an idea of who they should be working with [because] most of the custodians will
Oasis Group spent eight months developing a scoring methodology, sending out surveys, verifying responses and building out its first Vantage Point Peaks report. The goal was to create an "empirical" study that dives deeper than the typical surveys of wealth management firms that ask roughly a dozen questions with results often based on opinions, O'Connell said.
Oasis Group developed a survey of 219 questions across 12 themes about a custodian's current product offerings and the execution of those offerings. The firm also evaluated the product demos of each custodian and interviewed at least two clients per firm to help ensure the responses were accurate, such as verifying that any new product has been fully deployed and is fully integrated.
The first study reviewed custodians including Pershing, Fidelity, Altruist, Apex Fintech Solutions, Goldman Sachs, Hilltop Securities, Innovayte and RBC Clearing & Custody. These firms were selected based on having products actually in production and a large presence in the RIA market. None of these firms are clients of The Oasis Group, O'Connell said.
The results also break down which custodians are best for certain size firms, their top platform capabilities as well as asset-class mix, like alternative investments.
Report ranks custodians for trading capabilities and more
TradePMR ranked among the top trading and rebalancing capabilities, while Schwab was found to have the strongest digital account opening functionality and ability to execute products, according to the report findings. Conversely, Schwab's client portal was not highly configurable.
Still, O'Connell said they were surprised to find Scwhab's high scoring despite competitors claiming they were capturing business due to
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"When you hear everyone in the marketplace, you would think that Schwab's losing a lot of clients. The reality of it was completely different," he said. "Schwab's only lost about 2% of the TD firms."
Fidelity and Pershing also scored in the top rankings for their product offerings and execution.
O'Connell said another "big surprise" from the results overall was the lack of coverage in alternative assets once responses were verified.
"Although everyone says they can cover it, there are a ton of folks that actually don't cover it very well at all," he said.
The study found only half of the 10 custodians had wide coverage of alternative assets, despite that alts are a growing, in-demand investment class. A Cerulli report released July 25 found that 53% of surveyed institutional investors said the specialization in a specific asset class of investment was a top priority for them.
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Detailed analyses to aid advisory firms
The Vantage Point Peaks reports range from $10,000 for a streamlined report up to $20,000 for the full detailed report. O'Connell said the cost is far less than an RIA hiring a consultant to research custodians, a process that can take months.
"If I wanted to analyze all 10 custodians that are in this report, I could probably spend the better part of six months analyzing them fully … that can be easily $100,000 to $200,000," said David Miller, CFP and principal at Miller Wealth Management, a firm based in McLean, Virginia with about $750 million assets under management.
Miller is a client of The Oasis Group. Though he said his firm is not currently looking for a new custodian, he still found the report helpful.
"I've never seen a study that goes into this level of detail to help me do an analysis," he said. "So if I'm looking for a custodial platform, I have a reference point to where to go."
The Oasis Group also has a list of AI-first tech vendors that it releases periodically, called the
A number of these wealthtech firms and their representatives, including FP Alpha and TIFIN AG, will be at Financial Planning's first conference dedicated to AI in wealth management, called
