As Australians become more financially sophisticated, the role of custodians—those trusted institutions responsible for safeguarding assets—has never been more vital. Whether you’re an investor, a self-managed super fund (SMSF) trustee, or a company director, understanding how custodians operate in 2025 can help you make smarter decisions about your wealth and compliance obligations.
What Does a Custodian Do?
At its core, a custodian is a financial institution that holds assets on behalf of clients, ensuring their safekeeping, administration, and reporting. In Australia, custodians are crucial for investment funds, superannuation, and increasingly, for digital assets like cryptocurrencies.
- Asset Safekeeping: Custodians physically or digitally hold your shares, bonds, property titles, or other assets, reducing the risk of loss from theft or fraud.
- Transaction Settlement: They process and settle trades, ensuring assets move smoothly between buyers and sellers.
- Regulatory Compliance: Custodians help clients meet reporting and legal obligations, particularly for super funds and managed investment schemes.
- Record Keeping: Accurate records are maintained for tax, audit, and investor statements.
In 2025, the scope of custodianship is expanding, with many custodians now offering services for digital asset storage, ESG (Environmental, Social, and Governance) reporting, and advanced cybersecurity protections.
Custodians and Superannuation: New Rules in 2025
Superannuation funds—both industry and SMSFs—are heavily reliant on custodians for compliance and security. The Australian Prudential Regulation Authority (APRA) updated its Prudential Standard SPS 231 in late 2024, tightening requirements for how super funds select and monitor custodians.
- Stricter Due Diligence: Trustees must now perform more rigorous checks on custodians’ solvency, cybersecurity, and operational resilience.
- Digital Asset Custody: New APRA guidance covers the custody of tokenised assets and cryptocurrencies, requiring specialist custodians with robust multi-signature and cold storage solutions.
- Transparency: Funds must disclose their custodian arrangements more clearly in annual member statements.
These changes aim to protect Australian retirement savings from evolving risks, especially as super funds diversify into alternative and digital investments.
Custodians and the Rise of Digital Assets
The digital asset boom has forced custodians to innovate. In 2025, several major Australian banks have launched or expanded digital custody services, catering to institutional investors, family offices, and even retail clients dabbling in crypto ETFs.
- ASIC Guidance: The Australian Securities and Investments Commission (ASIC) released new guidelines in early 2025 for digital asset custodians, focusing on key risks like private key management, insurance, and disaster recovery.
- Real-world Example: CBA’s digital custody arm now secures billions in tokenised assets, from property to carbon credits, meeting both APRA and ASIC requirements.
- Global Interoperability: Australian custodians are also adapting to international standards, such as ISO 20022 messaging for asset transfers, making cross-border investments more seamless.
Choosing a custodian with proven digital capabilities is now essential for anyone investing beyond traditional shares and bonds.
What to Look for in a Custodian in 2025
With new regulations and asset classes, picking the right custodian means more than just comparing fees. Here’s what to consider:
- Regulatory Status: Is the custodian licensed and compliant with APRA, ASIC, and AUSTRAC requirements?
- Technology: Do they offer secure online access, multi-factor authentication, and digital asset custody?
- Reporting: Are their statements timely, accurate, and compatible with your accountant’s systems?
- Reputation: Look for custodians with a strong track record and clear communication during crises.
- Insurance: Check for coverage on both physical and digital assets.
As the financial world evolves, a forward-thinking custodian isn’t just a back-office provider—they’re a strategic partner in your wealth journey.
