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04Custody check

Do you have custody?

Fee deduction, powers of attorney and trustee roles all count. Answer 7 questions and see what the rule requires.

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You or a related person hold client money or securities, or can take possession of them.

You or a related person hold client money or securities, or can take possession of them.

Checks clients write to third parties do not count. Assets received by mistake and returned within 3 business days do not count.

Your firm can take its advisory fee straight out of client accounts at the custodian.

Your firm can take its advisory fee straight out of client accounts at the custodian.

Fee deduction counts as custody, with a lighter rule.

You can instruct a custodian to move client money, for example under a general power of attorney.

You can instruct a custodian to move client money, for example under a general power of attorney.

Standing instructions to send money to third parties are a common case. We did not verify the SEC staff conditions that can lighten this, so confirm them.

You or a supervised person is a trustee, general partner or managing member that can reach client assets.

You or a supervised person is a trustee, general partner or managing member that can reach client assets.

This includes pooled vehicles you manage.

A related person (a firm that controls you, you control or shares control with you) holds client assets connected to your advice.

A related person (a firm that controls you, you control or shares control with you) holds client assets connected to your advice.

You advise a limited partnership, LLC or other pooled vehicle that holds client assets.

You advise a limited partnership, LLC or other pooled vehicle that holds client assets.

You or a related person acts as the qualified custodian for your clients.

You or a related person acts as the qualified custodian for your clients.

Custody resultSelf-check

Answer all seven questions. Your result and next steps appear here.

Rules behind this, with sources
RuleWhat it saysStatusSource
What counts as custodyHolding client funds or securities directly or indirectly, or having any authority to obtain them. That includes authority to withdraw from a custodian on your instruction (including under a general power of attorney), trustee and general partner roles, and assets held by a related person in connection with your advice.Regulation text
read 2026-10-16		17 CFR 275.206(4)-2(d)(2)
source
Custody ruleWhere an adviser has custody, client funds and securities are held by a qualified custodian, clients receive account statements, and an independent public accountant verifies them by surprise examination at least once each calendar year, with exceptions in the rule.Regulation text
read 2026-10-16		17 CFR 275.206(4)-2(a)
source

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