Investors are less satisfied with the service provided by their global custodians this year than a year ago, as providers struggle to cut costs and deal with a deluge of regulatory changes, a survey has found.

In its 2014 global custody survey, R&M Consultants said Switzerland’s Pictet had taken top position as the custodian ranked most highly by clients, followed by RBC in second place and BNP Paribas in third.

In last year’s international ranking, RBC had come first, followed by Pictet and Northern Trust.

However, scores from respondents fell between 2013 and 2014 for all of the top seven custodians in the ranking, with the overall score down by 0.12 at 5.76 in the latest survey.

Richard Hogsflesh, managing director of the consultancy and author of the report, said: “It is rare to see scores decline so comprehensively as they have this year.”

In the past, such declines had been linked to falling market values, he said, but he noted that was clearly not the case now.

He suggested scores may have fallen in reflection of the stress people in the sector were under from the many regulatory changes the banking industry is dealing with right now.

It said it was hard to find anyone in the investment world unaffected by changes to regulation such as AIFMD, FATCA, FTT, Form PF, CFTC, Dodd Frank, EMIR, T2S, Rule 442 and UCITS 5.

However, given the biggest fall in satisfaction scores was in the US, Hogsflesh said tighter budgets could also be to blame.

“Cost cutting, client service and relationship management are the cornerstones of good service levels,” he said.

“When RMs (relationship managers) no longer have the budget to travel regularly to see clients and are being forced to confine communication to electronic media, be it emails, conference calls or video links, it strips out the human element.”

The survey took in 748 responses, the consultancy said, 30% of which were from asset owners, 62% from asset managers and 7% from banks.

Respondents were asked about different aspects of global custody ranging from core skills such as settlements and income collection to customised services such as securities lending and processing of alternatives.

According to responses from the UK and Europe alone, client satisfaction was roughly on a par with last year.

Overall scores from UK clients dipped by 0.01 to 5.53 in 2014, while scores from European respondents ticked up 0.02 to 6.30.

However, overall scores from the US alone fell by 0.32 to 5.72 between the two years. 

Pictet topped the UK and US rankings, with UBS coming first in the European ranking.

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