I have been calling financial planners this week to ask them if they would like to help us test some new software . On of the things I ask them is what firm they use as a custodian. I am mainly talking to financial planners who manage their clients assets for them. That means that the planner is able to trade and manage assets in the client’s account. Planners custodian their accounts with companies like Schwab, TD Waterhouse, and Ameritrade. What is confusing is that there is also the concept of a broker dealer, and a clearing house. It is important to know who the clearing house is because that will be the source of account downloads. If I understand it correctly big companies like Schwab and Waterhouse do both the broker dealer function and the clearing house function. But there are broker dealers who use a separate clearing house like Pershing. In talking to planners it is important for me to know the difference because it will impact our testing. I am enjoying learning all this new stuff.
Marion's Blog 