What type of relationship is a custodian considered?

A custodian is considered to have a contractual, non-fiduciary relationship with their clients. This type of relationship is characterized by the custodian holding and safeguarding assets on behalf of the client, primarily following the client's instructions without having a legal obligation to act in the client’s best interest. The custodian's primary role is to provide administrative services, such as safekeeping of securities and managing transactions, while the financial decisions and asset management are typically the responsibility of the client or their chosen advisors.

In contrast to fiduciaries, custodians do not have the same level of duty to prioritize the client's interest above their own. This allows them to operate within the parameters defined by the mutual agreement or contract with the client, focusing on service delivery rather than investment advice or management. This distinction is crucial in understanding the dynamics of the custodian's role in a financial relationship, as custodians are bound by the terms of their contractual agreement rather than fiduciary duties that require a higher standard of care.