INTRODUCTION
We are pleased to present an extract from this leading survey, which measures customer satisfaction by means of questionnaires completed by a wide range of institutions around the world.
RESULTS
Over the years, the services delivered by custodians have become increasingly consistent - thanks to the greater automation of operations, markets becoming paperless and communications being standardized and electronic. As a result, the rankings of client satisfaction do not change year-on-year as significantly as they did in the past. All the same, if you delve more deeply, you see that a lot is revealed.
In the overall table, every qualifying custodian raised its score year-on-year, except for two providers. Suffering just a small drop-off in their overall rating of client satisfaction were J.P.Morgan and State Street.
The 'Experts' table saw BNY Mellon swap places with Brown Brothers Harriman, who took pride of place this year.
METHODOLOGY
The R & M Global Custody Survey measures customer satisfaction by means of questionnaires completed by a wide range of institutions around the world, being those involved in using the services of global custodians. Almost 900 qualifying responses were received for the 2008 survey.
To qualify for the survey, a global custodian's business must cover at least five countries of investment in addition to the country or countries where the global custodian and client are domiciled. The global custodian need not serve clients based in more than one country or geographical region.
In order to qualify for entry into the survey, global custodians were expected to receive a minimum of 30 responses. Of these, at least 15 must come from third party investment managers dealing with more than three global custodians. A response from an investment manager within an organization associated with or related to a global custodian is only allowed if that investment manager also submits responses for at least three of the third party custodians that appeared in the previous year's survey.
The survey analysis examines each of four geographical regions in turn: North America, United Kingdom, Continental Europe and the Rest of the World. These groupings reflect the geography of the responses.
To qualify for each region, a global custodian must receive 10 responses from institutions in that region
(except 5 is the minimum for 'Rest of the World'). The minimum number of responses to qualify for an individual country table is 10.
Ranking methodology entails respondents rating their counterparties using a scale of 1 to 7 (seven being excellent and one being unacceptable) across 36 separate service elements, grouped into 11 broad service categories, across securities services and treasury services. The service elements include technology, reporting, settlement, safekeeping, income collection, tax reclamation, securities lending, performance measurement, foreign exchange, cash management and fees.
R & M Surveys asked respondents to place the 11 service categories in order of importance. This ranking can be used to determine the importance of each bank's relative strengths and weaknesses.
In addition to analyzing the results by geography, the survey considers different client types. Firstly, there is a focus on investment managers, with some distinction between direct relationships (i.e. those investment managers who appointed and pay for the custodian's services) and third party relationships (i.e. those investment managers acting for an institutional investor who appointed and pays the custodian). Secondly, the focus is on pension funds/foundations/charities/others.
Overall Survey Rankings
OVERALL RANKING OF CLIENT SATISFACTION
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2010
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2009
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Score
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Regions qualified
(maximum of 4)
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1
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2
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6.46
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♦ ♦ ♦
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2
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3
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RBC Dexia Investor Services |
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6.32
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♦ ♦ ♦ ♦
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3
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4
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6.10
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♦ ♦ ♦
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4
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5
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5.85
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♦ ♦ ♦ ♦
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5
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6
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5.79
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♦ ♦ ♦
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6
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8
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5.56
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♦ ♦ ♦ ♦
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7
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-
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Citi |
 |
 |
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5.48
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♦ ♦ ♦
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8
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7
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5.40
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♦ ♦ ♦ ♦
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9
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9
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State Street |
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5.21
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♦ ♦ ♦
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Rankings by the Experts
RANKING BY RESPONDENTS USING 5+ CUSTODIANS
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2010
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2009
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Score
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1
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2=
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5.52
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2
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1
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5.28
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3
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8
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State Street |
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5.16
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4
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4
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5.14
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5
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7
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5.09
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6
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6
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Citi |
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5.07
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7
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5
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4.92
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THE FULL REPORT
The full survey write-up is a must-have for institutional investors, fund managers and other users of securities services, together with service providers and other industry participants. It drills down to performance in different geographies - with ratings by clients in each of North America, the United States, Canada, Europe ex-UK, the United Kingdom, Switzerland and the Rest of the World. It also examines client satisfaction among various client types - asset owners (pension funds, foundations, charities, etc.), asset managers (with distinction between direct and third party relationships) and third party administrators.
As well as more than 20 results tables, the full survey report contains much analysis and comment, together with individual bank profiles. There is also a detailed examination of each of 43 separate service elements - showing each custodian's score against the industry average, thus highlighting strengths and weaknesses.
The 2010 edition of the full survey report is due for publication in May. Buy it now and you will get complimentary access to the 2009 report in the meantime.
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