eFinancialCareers

Keeping the paperwork for other people’s assets.

Global custodians once had large filing systems for their core work – storing certificates of share ownership for their clients. Today, these certificates are stored electronically, making custody much less space-intensive. Custodians levy a fee (typically up to 0.08%) of the assets they’re managing.

Trends

Global custody is big business and is growing fast. In 2006 the top ten custodians held over £36 trillion in assets – up 40% on 2005. But the industry is consolidating – for example, 2006 saw the merger of Bank of New York and Mellon Global.

Custodians are also pushing into new areas, notably servicing hedge funds. To save money, some have shifted UK operations out of London to regional cities.

Key players

JPMorgan had the most global custody assets by value in 2006. However, the top slot is now occupied by the merged Bank of New York and Mellon.

Roles and career paths

Much of the work is administrative and repetitive, but the role of custodian has widened to a range of other services. These include income collection (for example collecting dividends from clients’ investments), performance measurement (calculating the returns clients’ investments have made over time), trade support (ensuring trades are settled properly) and proxy voting on behalf of clients at shareholder meetings.

Custodians specialise in a particular area, so what you do will depend on where you work. Custodians also offer more client-focused and technical jobs. Relationship managers, for example, work with clients to reassure them that their assets are safely maintained. Emily Ayre, a custody specialist at recruitment firm Morgan McKinley, says graduates typically move into these more interesting positions after a few years and can be fast-tracked into these roles. Few global custodians offer graduate training programmes, so it’s worth sending in your CV speculatively.

Pay

Global custodians are paid fairly modestly – six figures are rare. But according to Morgan McKinley, pay for some junior custody jobs has risen by around 20% in recent years. A junior sales and business development professional can expect a salary of £30k to £35k, plus a small bonus. The best-paid people working in custody are relationship managers and product development specialists.

Skills

Emily Ayre at Morgan McKinley says people going into areas such as settlements and corporate actions may not need a degree: “They will, however, need to be organised, process-driven and able to work under pressure. Once people have gained a grounding in settlements or corporate actions, they will be equipped with the skills to allow a move to other areas within operations or an internal move within custody,” she adds.

Scott Dickinson, global relationship manager, BNP Paribas Securities Services, says people going into relationship management need two to five years’ operations or client services experience in the financial sector. “Candidates should be able to demonstrate strong communication, planning and selling skills,” he adds.