Feature Articles Whole of wealth reporting the defining test for non-custody advice

Non custody delivers strategic flexibility, but introduces operational strain

The strategic appeal of non-custody is clear in the data. Advisers most commonly cite access to a broader range of investment opportunities, greater flexibility and the ability to deliver a total wealth solution as the primary reasons for using non-custodial assets. These benefits are cited most strongly by HNW focused advisers, reflecting the bespoke requirements of wealthier clients.

At the same time, the research highlights a persistent operational tension.

Complex administration and challenges with consolidated reporting and performance tracking are the most frequently cited disadvantages of non-custody investing, and these issues are raised more often by HNW advisers than by the broader market. Rather than diminishing with scale, complexity increases as portfolios grow more sophisticated.

This creates a practical challenge for advisers. Non custody assets allow for more precise portfolio construction, but often require additional manual processes to maintain oversight, reconcile data and explain outcomes.

Clients judge advice holistically, not by asset type

One of the more revealing findings in the qualitative research is how clients view their investments.

Many advisers report that clients do not distinguish between custodial and non-custodial assets. From a client perspective, investments are simply investments. They expect their adviser to understand and explain the whole picture.

This matters because advisers are operating in an environment of heightened scrutiny. Nearly half of advisers report an increase in client communications following recent market disruption, with volatility prompting more frequent and more detailed conversations.

Fragmented reporting has become more than an operational inconvenience. It directly impacts the adviser’s ability to answer questions clearly and confidently. Clients are not asking whether an asset sits on or off platform. They are asking whether their adviser has full oversight of everything they own.

Whole of wealth visibility has moved from preference to expectation

In the Adviser and Client Experience survey, advisers highlighted difficulty in getting a complete view of all assets their clients hold, particularly where portfolios include non-traditional or off platform investments. This challenge is more pronounced among HNW advisers, who typically manage fewer clients but with significantly higher asset and structural complexity.

As non-custody assets account for a growing share of client wealth, advisers are under increasing pressure to demonstrate that they retain control and visibility across the entire portfolio.

The limits of keeping non-custody assets off platform

For many years, advisers accepted that non custody assets would sit outside their primary platform environment. Spreadsheets, third party reports and manual reconciliations filled the gap.

That approach is increasingly difficult to sustain.

The research shows that advisers now place as much importance on technology integration for non-custody assets as they do for custodial investments. Among HNW advisers in particular, integration is often seen as critical, given the complexity of private investments, direct holdings, and alternative structures.

Where non custody assets remain outside the adviser’s main platform, advisers report:

• higher administrative burden
• slower reporting cycles
• greater reliance on manual processes
• and increased pressure at end of financial year.

These challenges may not always be visible to clients, but they shape the quality and consistency of the advice experience.

EOFY exposes fragmentation most clearly

End of financial year is where the weaknesses of fragmented non custody management are most apparent.

Tax reporting for non-custody assets is often more complex and more time sensitive, particularly where investments sit outside standard platform processes. Advisers consistently call for clearer tax summaries, more timely information and better coordination with accountants.

When non custody assets are not incorporated into a consolidated reporting and tax framework, EOFY becomes slower, more manual and more stressful for advisers and clients alike.

Why platform choice has become central to non-custody advice

The data does not suggest that advisers lack the technical skill to work with non-custody assets. It suggests something more subtle. Advisers are increasingly using non custody within operating models that were not designed to support this level of complexity at scale.

This is where platform choice becomes decisive.

From our work with advisers operating at the HNW end of the market, we consistently see that the right platform does not remove complexity but contains it by bringing custodial and non-custodial assets into a single environment where they can be viewed together, reported consistently and explained with confidence.

This matters in three practical ways:

• First, transparency. When non custody assets are visible alongside the rest of the portfolio, advisers can respond to client questions quickly and accurately, particularly during periods of volatility.
• Second, reporting and explanation. Consolidated reporting enables advisers to discuss outcomes across the entire balance sheet, rather than explaining parts in isolation. For HNW clients, who assess advice holistically, this is essential to maintaining confidence.
• Third, scalability. As non-custody grows from a small allocation to a material share of the portfolio, manual processes become a constraint. Platforms that support non custody within a whole of wealth framework reduce reliance on spreadsheets and duplicated effort, particularly at EOFY.

It is also clear that not all platforms approach this in the same way. Some continue to treat non-custody as an exception, leaving advisers to manage visibility externally. Praemium is based on the assumption that non-custody is part of the adviser’s core proposition, particularly for sophisticated portfolios.

The difference becomes most visible at the moments that matter most. During market stress. At end of financial year. And when clients ask simple but searching questions about their total wealth position.

What this means for advisers considering non-custodial assets

The data tells a consistent story.

Non-custody assets are already embedded in HNW portfolios. Advisers value them for the flexibility and access they provide. At the same time, advisers are under increasing pressure to demonstrate control, clarity and confidence across complex client balance sheets.

For advisers considering or expanding their use of these assets, the question is no longer whether non custody has a role in their offering. It is whether the platform supporting their advice model can deliver the level of visibility, reporting and explanation that HNW clients increasingly expect.

Whole of wealth reporting is not simply about convenience. It is about credibility.

As non-custody continues to move into the mainstream, the ability to see, explain and stand behind the entire portfolio is becoming a defining characteristic of high quality HNW advice.

^{The research referred to in this article is from the Praemium/CoreData non-custody research Q1 2025.}