A custodian is the company that has physical possession of your assets.
For example, our independent investment firm uses Charles Schwab as the custodian for client assets. The firm directs the investments, but does not have “custody”, or possession, of a client’s money.
When you make deposits to any type of account, your checks are made payable and deposited directly to your custodian. Your custodian is responsible for not allowing your money to get into someone else's hands.
Using a large, well known custodian protects you from investment fraud.
Many independent investment advisors use custodians such as Fidelity, Pershing, TD Ameritrade or Charles Schwab. All are reputable.
To learn more read One Simple Way To Avoid Investment Fraud which explains the four ways custodians help protect you from investment fraud.
