Comparing custodians for a billionaire family office
Built on Chapter 7 of The Single Family Office by Richard C. Wilson. Full chapter text: FamilyOffices.com.
Compare custodians using the same account and service requirements. A billionaire family's relationship may involve several entities with different signers and reporting needs. A strong proposal should explain how the institution will handle those distinctions and what the office must provide for the arrangement to work.
Chapter 7 treats outside firms as services the family selects for a defined purpose. A custody comparison should follow that approach. Decide what the family needs to hold, administer, and report before comparing presentations about the institution's wider relationship offering.
Use a common account picture
Prepare a proposed account list with the relevant owner and required functionality. Ask qualified advisors to confirm the ownership and authority questions. Give each candidate institution the same useful description of the assignment, through an appropriate information-sharing process.
Then ask each institution to identify assumptions in its proposal. A comparison is misleading if one firm assumes ordinary individual accounts while another includes complex entity onboarding. Resolve those differences before interpreting the quoted cost or implementation effort.
Distinguish custody from other services
A family may use the same institution for custody, lending, and investment management. Evaluate those functions separately enough to understand what each arrangement does. Ask whether a quoted service depends on placing other business with the institution.
Keep a record of which terms change if the family later moves part of the relationship. A favorable headline arrangement can be difficult to assess without knowing its conditions. Have the appropriate professionals review the actual agreements and explain the consequences relevant to the family.
Test the information the office will receive
Request representative reporting and a description of how data can reach the family's accounting process. Ask how corrections are communicated and how a missing transaction is investigated. A presentation screenshot does not show whether the underlying information can be reconciled to original statements.
The reporting employee should participate in this part of the comparison. Have them describe what they need to maintain the records and which proposed features would remove manual work. Record a feature as confirmed only after the institution explains how it applies to the actual accounts.
Examine authority and payment procedures
Ask how the institution recognizes approved signers and handles changes in authority. Discuss what happens when an authorized person leaves the office or cannot respond. The family should know which documents the institution requires and who checks that a change has taken effect.
Ask the institution to explain the available transaction controls. Bring those procedures to the office's legal and operational advisors for assessment. Avoid assuming a relationship manager's familiarity with the family is a substitute for the institution's formal authorization process.
Ask about service failures before they occur
Identify the person handling ordinary requests and the escalation route for an urgent problem. Ask how the office can report incorrect data or an unresolved transfer. A responsible contact should be able to explain what information the institution needs to investigate.
Assess support during the hours the office actually works. A family and its advisors may be in different places. Ask what happens when a necessary verification arrives while the principal is traveling. The answer should describe a permitted procedure, not an informal exception someone hopes to obtain.
Compare the entire cost description
Request the relevant fee schedule and the assumptions used in the proposal. Ask about transaction services, special assets, and additional reporting where those apply. Have qualified advisors review any proposed lending terms separately.
The office should be able to explain which costs are fixed, which depend on activity, and which depend on other business placed with the institution. Where a term is unclear, request clarification in writing. A comparison table should record the answer rather than replace it with a favorable guess.
Include the cost of moving again
Ask what records the family can obtain if it later changes institutions. Discuss the treatment of assets that may be difficult to transfer and the work needed to close accounts. Those details affect how much practical freedom the family retains after selecting a provider.
Keep the comparison and supporting answers with the decision record. The family can then revisit the original reasons if its needs change. A later service complaint becomes easier to assess when the office knows exactly what was promised and which part of the arrangement was important to the selection.
What to take from this
- Compare institutions against one account and service description.
- Test data delivery and authority changes.
- Understand the conditions behind pricing and bundled services.
This page is general information, not legal advice. Family governance documents and dispute processes should be reviewed by a qualified attorney.
Questions and answers
Should custody and investment management be evaluated separately? Understand each function and the conditions linking them, even when one institution provides both.
Who should help compare reporting? The employee or provider who will reconcile and use the information.