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Meaning / Definition of

Custodial Fee

Categories: Brokerages,

The amount a brokerage or other financial institution charges customers to hold their securities, thereby reducing the customer's risk of loss or theft of the securities and making them available for sale by the brokerage if requested by the customer. Just as a bank, the custody gives the investor a safe place to maintain their assets with little risk, but unlike a bank, the assets are unavailable to the custodian for its use. Because the held assets stay in the client's name, they are not interchangeable for the custodian.

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