Buy-siders urge custodians to improve communication

Asset managers at NeMa line-up to bemoan custodian interaction and claim they want to see more collaboration.

A group of asset managers has called for greater interaction from their global custodians, while also pushing for more collaboration among them.

Speaking at the NeMa event in Dubrovnik, representatives from Standard Chartered, BlackRock, Franklin Templeton Investments and Capital Group voiced their concerns on their relationships with custodians. 

Along with bemoaning the lack of interaction and collaboration, the group did reassure custodians that they will continue to lean on their services going forward, despite some communication issues.

“Don’t send us the document, tell us when the deadline is and walk away,” said Murray Preston, operations relationship manager at BlackRock. “Send us stuff which is important and pick up the phone.” 

Preston used corporate actions as an example of having increasingly complex requirements and called on custodians to help asset managers with the process.

“Corporate actions have got so much more complicated in the last eight years. There is a tendency for custodians to say ‘here’s your info we need your response’.

Lisa Martinez, assistant vice president network management at Capital Group also highlighted some of the issues when it comes to communication and assistance from custodians. 

“I send a question out to three custodians all using the same sub-custodian and I get three different responses back. I don’t know who’s right, so I wind up thinking who is most logical or taking two out of three.”

Lisa’s solution to the problem was more collaboration in the industry, a sentiment echoed by her fellow panelists and 61% of the audience in a poll.

“Our partnerships are very long with global custodians, we develop relationships and we expect them to know how we are and act accordingly and give us that information,” said Gretchen Larson, director, enterprise bank relationship management at Franklin Templeton Investments.

Both the panelists and the majority of the audience – aside from 19% in a poll – agreed that there will continue to be a need for asset managers to use custodians, but urged reform

“We absolutely do need Global Custodians,” added Larson. “The best Global Custodians are the ones who partner really well with us and every body else in the chain.

“We did think at one time about whether we could run this network ourselves. [We thought] We could take on a foreign custody manger role but that would be very costly.”