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3 min read

Why the One-Size-Fits-All Approach to Custodial Service Pricing May Not Work for RIAs

Aug 24, 2021 11:32:34 AM

Updated April 10, 2024



Pricing starts with a conversation, not a rate sheet

If you’re thinking of moving to a different home, you would probably like to see the new place in person before making one of life’s significant financial commitments. You can get an idea of what the house looks like from pictures, but it’s always better to walk the halls and make sure you know what you’re buying before determining a fair offer.

As an RIA, how do you determine what’s fair regarding pricing, service, and support from a custodial services provider? 

At TradePMR, we take a similar approach to house-hunting when evaluating RIAs who are interested in working with us. We like to understand their unique business before determining what pricing structure would make the most sense for our relationship.

Avoiding the Cookie Cutter

RIAs have a range of providers to choose from when looking for custodial services. When evaluating these prospective providers, advisors are often immediately met with pricing sheets detailing rack rates for custodial services. This cookie-cutter approach may save time for the provider, but it can lead to advisors signing contracts that may not be the best fit for their business.

Without knowing how an advisor’s business works, how can a provider determine a pricing structure that makes sense? We think pricing needs to take into account a range of factors. Custodial service providers should seek to understand the advisor’s stage of growth, their client breakdown, and how they build client portfolios before developing a pricing proposal. That’s the approach we take at TradePMR.

Truly Understanding the RIA

The first conversations RIAs have with a prospective provider should be exploratory. These conversations are an excellent opportunity to dive into what makes your firm unique. How do you run your business? Whom do you serve? Where do your clients derive the most value from your service? All of these are essential points for the service provider to understand. Having open communication on these items can lead to a much more successful relationship, backed by a pricing model that fits the needs of your unique business.

Personalized and Negotiable

Once the custodial service provider truly understands your business, they should develop a personalized pricing proposal with your unique challenges and opportunities in mind. The pricing structure should benefit both parties while putting you in the best position to succeed in the long term. When that pricing proposal is shared, it shouldn’t be an end-all-be-all. If there are other ways you feel like the pricing could be structured to better fit your business, you should raise that option, and the provider should be open to a discussion. There are many ways to structure pricing with a custodial service provider, and exploring those options helps make sure the relationship works well for everyone.

Our Approach to Pricing at TradePMR

This open and tailored mindset is at the backbone of our pricing model at TradePMR. We believe we can help RIAs grow their businesses and achieve long-term success – and we know that mission starts with pricing. By taking on this flexible structure to pricing and making sure any relationship is mutually beneficial for our team and the RIAs we work with, advisors can be more confident that they’re setting themselves up for a successful contract for the future of their business.

Are you thinking of making a custodial transition? Fill out our confidential survey linked to the below button with some quick information on your firm. We’ll review your responses and follow up to connect to discuss your RIA further. This information will help us develop a pricing proposal to meet your needs and ideally facilitate your success.




Written by TradePMR