The client, a Fortune 500 company that focuses on property, casualty, and auto insurance and offers life, health, and homeowners insurance along with investment and retirement planning products, has approximately USD 20 billion in AUM, primarily invested in US and Euroclear securities.
The client had a long-standing relationship with its global custodian, but was dissatisfied with the technology infrastructure and service levels and had not conducted a market analysis of other providers for some time.
The client’s requirements included the following:
A custodian that could process the full suite of SWIFT messages, and provide accurate securities and corporate actions processing with a more user-friendly client portal.
Improve its service by having more competitive sweep cut-off times, better issues resolution, and support for its entire book of business.
Ensure its current custodian fees were competitive.
We began by taking the following steps:
Assessed the company’s existing global custodian services and confirmed a business case to move forward with a global custodian evaluation.
Ascertained the client’s pain points and developed an understanding of its scope of requirements.
Documented and leveraged pain points and requirements to create a customized RFP comprising the following main sections: Functional Requirements, Technical Requirements, Securities Lending, Legal & Compliance, and Conversion & Training.
Distributed the RFP to six global custody industry leader candidates, giving them one month to respond.
Worked with the client to create customized evaluation criteria by which the RFP could be scored and evaluated.
Evaluated the RFP responses against the customized criteria, and short-listed four candidates for in-person presentations customized by Cutter.
Once the short list was identified, the following steps were taken:
With the company’s stakeholders, we evaluated each presentation against an agreed-upon list of scoring principles.
Selected two finalists and conducted reference checks and in-person site visits.
Recommended a conversion to a new global custodian that best satisfied the client’s global custodian requirements at a competitive price.
Helped facilitate the contracting process and a successful global custodian conversion, which was completed within three months.
Provided two months of post-conversion support, before transitioning the new global custodian oversight responsibilities to the investment operations team.
Brought our recommendation to senior management and the CIO, who agreed a conversion was necessary.
Improved service levels and technical capabilities of its global custodian through conversion.
Provided critical expertise to help the client ensure key personnel remained focused on day-to-day investment operations.
With Cutter’s industry experience and collateral from previous engagements, the client achieved the following:
Identified and confirmed critical gaps in its global custodian service provider.
Understood the improvements needed to enhance its service.
Received a comprehensive global custodian evaluation and timely conversion of assets.
Ensured process efficiency and mitigated risk.
Assisted in fee negotiations that saved USD 250,000 on annual custody fees.