According to the PLANSPONSOR/Bank of New York Research Study on Master Trust & Custody , less than 42% of public plan sponsor respondents would consider having their custodian manage money for the plan, compared with nearly 62% of corporate plans.
The most common reason noted for not choosing their custodian to manage money was a perceived conflict of interest, cited by nearly half (47.1%) of corporate and 41.2% of public plan sponsors. Still, nearly a quarter of both corporate and public plan respondents said they were not aware that managing money was a core part of their custodian’s business, while 11.8% of corporate plans and 23.5% of public respondents cited “other” reasons.
Of some comfort to custodians – just 11.8% of public plan respondents and 17.6% of corporate plans cited “lack of ability” on the part of their custodian to manage money.
When it came to reporting, public plan respondents seemed to be much more in touch with their portfolios, with 37.5% receiving updates continuously/real-time, and 25% receiving information on a daily basis. Just 23.3% of corporate plans were receiving continuous updates, and just 15.1% on a daily basis.
Monthly appeared to be the frequency of choice for corporate plans, cited by 55.8% of the survey respondents. Twenty-nine percent of public plan sponsors currently receive reports on a monthly basis.
As for delivery, plan sponsor respondents are taking advantage of a variety of media. Three-quarters of public plan respondents are tapped in to electronics/web site, while nearly 71% are getting paper/mail reports. That compares with nearly half of corporate plan sponsors that access information via a Web site, and 57.5% that received paper copies. Roughly one-in-five corporate and public plan sponsors are getting information on disk, while about a quarter are receiving the information via email.
The survey was based on 123 usable plan sponsor respondents during October and November 2002, based on a questionnaire developed jointly by The Bank of New York and PLANSPONSOR.
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