A senior custody salesman was recently explaining his place in his employer's pecking order. "Of course, we have all these high-powered executives who are chasing multi-million dollar outsourcing transactions, while I am simply plugging away at selling much lower-value custody deals," he suggested, with just a hint of a sly grin. He knew perfectly well that his point was well made: hot as it might be, outsourcing needs to be supported by a solid revenue stream from custody.

Few have been able to say it publicly but outsourcing makes next to nothing for custodians. David Spina, who stood down as chairman and chief executive of State Street in July, came as close as anyone to admitting that it is not the primary engine of current revenue growth. In an interview with Financial News, he said providers would have to look at overall profit from clients, rather than making money from outsourcing alone. "Maybe outsourcing changes the nature of investor servicing, rather than being a standalone," he said.