One of the defining qualities of an RIA is that we never hold physical custody of client assets.
We believe the person giving investment advice should never be the same person holding the money. That is an undeniable conflict of interest.
Whether an RIA is a boutique practice with a handful of partners, or a national multi-billion dollar firm, the custody rule of the Investment Advisers Act of 1940 requires all RIAs to manage client assets using a third-party custodial system.
The custodian itself holds the securities, generates monthly statements, and executes trade orders.
We have an obligation to remain multi-custodial so that our business is not beholden to any one platform.
Our preferred custodians include:
Altruist
Here's a brief walk-through of the system: CLICK HERE
A few general guardrails we set at a firm level:
We must never be in possession of the client level password for account access, this constitutes custody. We may only manage investments through an approved custodial system.
We must never physically handle cash or checks for deposit into the account. We may assist the client in linking his or her bank account for proper cash transfers.
Wire transfers are only allowed with documented approval from the CCO.
Third party transfers or check distributions are only allowed with documented approval from the CCO.
The above guidelines are in place to protect all of us. Those specific cash management situations are rare and we'll work together to ensure they are handled carefully.