Transfer Agent vs. Custodian: What Are the Differences?

A transfer agent is a professional who helps facilitate the transfer of securities from one owner to another. A custodian is a professional who safeguards assets and property. Both transfer agents and custodians play important roles in the financial industry, but they have different responsibilities. In this article, we compare and contrast the job duties of transfer agents and custodians, and we provide information on education and training requirements for each profession.

What is a Transfer Agent?

A Transfer Agent is a financial institution or company that handles shareholder records for publicly traded companies. They are responsible for maintaining accurate records of who owns what shares and facilitating the transfer of ownership when shares are bought or sold. They also issue and cancel certificates, track lost or stolen certificates and help shareholders with address changes or other account updates. Transfer Agents typically work for banks, brokerages or other financial services firms.

What is a Custodian?

A Custodian is responsible for maintaining the cleanliness and order of a designated area. This can include both indoor and outdoor spaces, such as offices, schools, hospitals, factories, and private homes. Custodians typically use cleaning supplies, such as mops, brooms, and vacuum cleaners, to clean floors and surfaces. They may also dust furniture, empty trash cans, and wash windows. In some cases, Custodians may also be responsible for setting up or taking down furniture, or for providing general maintenance and repairs. Custodians typically work during daytime hours, although some may work overnight shifts.

Transfer Agent vs. Custodian

Here are the main differences between a transfer agent and a custodian.

Job Duties

Transfer agents perform a variety of tasks, including researching and revising the records for each security listed on a company’s transfer agent register. They also communicate with investors by sending notices about changes to a company’s securities and updating their contact information. Transfer agents may also file documents with the Securities and Exchange Commission (SEC) on behalf of a company.

Custodians manage the physical securities held in a trust or other account. They ensure that only authorized individuals have access to these assets and keep records of any transactions made involving these securities. Custodians may also monitor compliance with applicable regulations regarding the storage and trading of these securities.

Job Requirements

Transfer agents typically need at least a high school diploma, although some employers prefer candidates to have an associate’s degree or higher. Many transfer agents also pursue certification through the American Association of Stockbrokers and Transfer Agents (AAST). Custodians typically need a high school diploma as well, but they might be able to find entry-level positions with only on-the-job training. Some custodians eventually pursue certification through the International Association of Machinists and Aerospace Workers (IAMAW).

Work Environment

Custodians and transfer agents typically work in different environments. Custodians often work in schools, hospitals or other institutions that require a lot of cleaning and maintenance. They may spend their days vacuuming hallways, mopping floors and scrubbing bathrooms.

Transfer agents usually work for banks, where they perform tasks like counting money, processing transactions and filing paperwork. While some transfer agents work in offices, others travel to meet with clients and conduct business on the road.

Skills

Both transfer agents and custodians need to have excellent organizational skills to keep track of the large number of documents and transactions they process on a daily basis. They also both need to be detail-oriented to ensure that all information is accurate and complete.

Transfer agents typically need good customer service skills as they often interact directly with clients, providing them with updates on their accounts and answering any questions they may have. Custodians usually do not interact directly with customers, but they still need to have good communication skills to coordinate with other financial professionals, like investment managers and stockbrokers.

Custodians need to have a strong understanding of the financial industry and the regulations that govern it, as they are responsible for ensuring that all assets in their care are properly safeguarded. Transfer agents also need to have a good understanding of the securities industry, but they primarily use this knowledge to execute trades and transfers quickly and accurately.

Salary

Transfer agents earn an average salary of $59,072 per year, while custodians earn an average salary of $33,554 per year. Both of these salaries may vary depending on the location of the job, the size of the company and the level of experience the employee has.