Press Release 1st April 2014
R & M Global Custody Survey 2014
Regulation and cost cutting drive down scores
There were wholesale changes to the overall rankings in the R&M 2014 Global Custody Survey with Pictet. RBC and BNP Paribas taking the top three places respectively and scores declined across the board.
Richard Hogsflesh, managing director of R&M Consultants and the author of the report, said: “it is rare to see scores decline so comprehensively as they have this year. When it has happened in the past it has usually been linked to falling market values. Clearly that is not the case at the moment. So what else can it be?”
“Everyone appears to be rushed off their feet and much of the talk is of regulation. AIFMD, FATCA, FTT, Form PF, CFTC, Dodd Frank, EMIR, T2S, Rule 442, UCITS 5, it’s hard to find anybody in the investment world who’s not been affected. Add to that the debate regarding the potential EU Directive on the single market in Europe for personal pensions and you can see that no one escapes. So maybe that’s why scores have fallen, reflecting the stress people are under.”
“But the biggest decline by far was in the USA. Perhaps there is another cause? Cost cutting. client service and relationship management are the cornerstones of good service levels. When RMs no longer have the budget to travel regularly to see clients and are being forced to confine communication to electronic media, be it emails, conference calls or video links, it strips out the human element. It’s not winning favours with clients.”
Pictet pushes to the top
In the overall results there is a return to pole position for Pictet – a place they have not occupied since 2003. The company hasalways come in the top three or four but this year sees them reclaim the title. In the words of one US based fund manager “I have no time to describe my issues with other custodians as I am really busy here but would like to express an opinion. Pictet is one of my top custodians and I would rate State Street as the worst due to getting someone to answer back on their help desk. I am just pleased with our relationship with Pictet as a custodian.”
Pictet were followed closely by second placed RBC, both of whom were some distance ahead of third placed BNP Paribas, followed by another gap before reaching the remainder of the field comprising BNY Mellon, Northern Trust, JP Morgan and State Street. Citibank and HSBC both failed to receive enough responses to qualify for inclusion in the overall table – Citi had more than the minimum of 30 but failed to meet the further test of qualification in three out of the four geographic regions. To be in the overall results you have to qualify in three out of the four regions. This means that Credit Suisse and UBS also only appear in regional tables where they qualified. HSBC only managed to qualify for the Experts and Asset Managers tables.
In the table, based on scores from managers who responded on five or more custodians, we see a different story with RBC taking top spot, beating BNY Mellon by the narrowest of margins. JP Morgan sit in third place followed by Northern Trust and State Street with HSBC and Citibank level pegging just ahead of BNP Paribas.
Clearly Swiss excellence still stands out as the top three positions are taken by Swiss banks (two of which don’t appear in the overall results as they did not qualify in three regions) but there are also strong performances by RBC, BNP Paribas, BNY Mellon.
Other tables available for publication:-
Asset Managers (also broken out for the UK and USA)
Pension Funds (also broken out for the UK and USA)
A selection of client comments
Notes to Editors
The total number of responses was 748. Thirty one per cent were from asset owners, 62% from asset managers and 7% from banks. Geographically from all four corners of the globe. A scoring system of 1 (low) to 7 (high) was used for all questions. The questionnaire covered 49 different aspects of global custody ranging from core skills such as settlements and income collection through to customised services such as securities lending and processing of alternatives.
For further information please contact Richard Hogsflesh firstname.lastname@example.org +44 (0)333 800 5501