Understanding custody and fund accounting: What do you need to know?


Fund accounting and custody services are two vital constituents of financial management, specially designed for High-Net-Worth Individuals (HNIs). These two critical services play distinct roles, demanding meticulous understanding and strategic decision-making. Let’s delve deep into custody services and fund accounting, unravelling their intricacies, and equipping you with essential insights you need to navigate your financial journeywith confidence.

What is fund accounting?

Fund accounting manages and records financial transactions and the performance of various investment funds, such as private equity funds, hedge funds, and mutual funds. By opting for this service, you can avail the help of a fund accountant who can compute the Net Asset Value (NAV) of your investments. The NAV represents the value per share based on liabilities and assets.

Additionally, fund accountants prepare accurate financial reports, including statements of holdings, expenses, and income, allowing you to evaluate your investment performance. Fund accounting ensures adherence to industry best practices, accounting standards, and regulatory compliance. Moreover, it assists you in managing expenses, tax planning, and optimising tax efficiency of your investment funds.

What are custody services?

Custody services involve the administration and safekeeping of your assets, such as cash, securities, and various investment products. When you avail custody services, a reliable custodian, generally a financial institution, takes responsibility for protecting and holding your assets. They ensure the security of your physical assets, maintain records of transactions, income, and investments accurately, and prevent unauthorised access.Custodians also help you navigate complex legal issues and implement risk management measures to protect your financial assets from potential theft or fraud.

Important considerations when selecting custody and fund accounting services

  • Perform due diligence

Before engaging with a fund accountant or choosing a custody service, thoroughly research the track record, reputation, and credibility of the service provider.

  • Assess security measures

Evaluate the security measures implemented by custodians to safeguard your physical financial assets and the digital infrastructure used by fund accountants to protect your financial data.

  • Opt fora team of experts

Select fund accounting and custody services from service providers with extensive knowledge and excellent experience in handling HNI portfolios. Access to a dedicated professional team is essential for efficient and structured financial management.

  • Look for flexibility and customisation

Seek fund accounting and custody services that offer personalised options aligned with your unique financial goals and investment strategies.

  • Consider regulatory compliance

Compliance with regulatory frameworks is a non-negotiable aspect of financial management. You should assess whether the custodian and fund accounting provider strictly adhere to relevant industry regulations and have a solid track record of compliance.

  • Look forcutting-edge technology

Consider fund accounting and custody services that leverage cutting-edge technologies like digital banking to enhance accessibility, convenience, and efficiency in handling your financial assets.

  • Assess charges and transparency

Carefully review the fee structure associated with fund accounting and custody services. Ensure transparency in costs.


As an HNI, fund accounting and custody services are crucial for maximising the performance of your assets and safeguarding them. By better understanding their different features and considering key parameters such as experience, security, transparency, and technology, you can make informed decisions to optimise your wealth effectively.

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