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Building a custodian is one of the most complex undertakings in financial services.
It requires regulatory approval, operational resilience, capital, technology infrastructure, and perhaps most importantly, trust from both regulators and the market.
Few professionals have experienced that challenge firsthand. Pieter Aartsen is one of them.
In this episode of the Wealth Insider podcast, host Christian Lindvall speaks with Pieter Aartsen, Managing Director of Execution Services at AFS Group, about the creation of Knox, a fully licensed Dutch custodian built from the ground up to serve independent wealth and asset managers.
Pieter shares the story of how a group of 25 asset managers came together to create an alternative to traditional custody providers, the regulatory and operational hurdles involved in launching a custodian, and how Knox ultimately became part of AFS Group's broader strategy.
The conversation offers a rare behind-the-scenes look at what it takes to build critical financial infrastructure from scratch in one of Europe's most highly regulated industries.
Why 25 Asset Managers Decided to Build Their Own Custodian
The origins of Knox can be traced back to a growing frustration among Dutch asset managers.
Many felt underserved by existing custody providers and believed the market needed a more modern, cost-efficient alternative designed specifically around their needs.
Rather than waiting for the industry to change, a group of 25 asset managers decided to create that alternative themselves.
Pieter was brought in to lead the initiative.
Drawing on previous experience launching new financial services businesses and regulated market infrastructure, he saw an opportunity to rethink custody from first principles.
The goal was not simply to replicate existing custodians but to build a leaner, technology-driven platform designed around the requirements of independent asset managers.
"Everything we decided in the beginning was based on input from asset managers." - Pieter Aartsen, Managing Director of Execution Services, AFS Group
Over the past decade, the number of fintech companies in Denmark has grown from fewer than 100 to more than 400, while fintech employment has expanded significantly across the region.
The Two-Year Regulatory Battle
Before Knox could serve a single client, it needed regulatory approval.
That proved to be one of the most demanding phases of the entire project.
Unlike traditional custodians, Knox was designed without a banking license. While fully compliant with custody regulations, this structure was relatively new in the Dutch market and required extensive discussions with the Dutch Authority for the Financial Markets (AFM).
The central question revolved around asset segregation and investor protection.
Could a non-bank custodian provide the same level of protection and operational safeguards expected from established banking institutions?
According to Pieter, gaining approval required more than technical expertise. It required patience, detailed documentation, and a highly experienced team capable of explaining every aspect of the proposed model.
"Without sweat, patience, and a knowledgeable team, you're absolutely not able to set up a custodian." - Pieter Aartsen, Managing Director of Execution Services, AFS Group
After two years of discussions and regulatory review, Knox successfully obtained its license.
But the work was only just beginning.
Building a Custody Platform from Zero
With regulatory approval secured, the next challenge was building the operational and technology infrastructure required to run a custodian.
Rather than relying on legacy systems, Knox chose to build a modern custody platform from scratch.
Working alongside their technology partner, the team developed the platform incrementally.
The first phase focused on core account administration and mutual funds before expanding into ETFs, listed securities, and additional asset classes.
The advantage of starting from zero was flexibility.
The challenge was ensuring every component met the reliability, accuracy, and control standards expected of a custodian responsible for safeguarding client assets.
Unlike client-facing applications, custody systems form the foundation of financial recordkeeping.
Every transaction, position, and ownership record must be accurate and auditable.
"It's not a reporting tool. It's really the basics, with an accounting system at the core." - Pieter Aartsen, Managing Director of Execution Services, AFS Group
As a result, extensive testing and validation became critical throughout the build process.
How a Small Team Achieved a Big Goal
One of the more surprising aspects of the Knox story is the size of the team behind it.
The original plan envisioned only a handful of employees supported by carefully selected outsourcing partners.
This approach initially raised concerns among regulators, who questioned whether such a small organization could maintain sufficient oversight and control.
To address these concerns, the Knox team documented every operational responsibility in detail, demonstrating how internal resources and outsourced partners would work together.
The result was a highly efficient operating model supported by deep expertise across legal, compliance, operations, and custody.
For Pieter, the experience reinforced an important lesson.
Knowledge, creativity, and teamwork can often compensate for limited scale.
"The combination of knowledge, patience, and creativity is key." - Pieter Aartsen, Managing Director of Execution Services, AFS Group
The project became a powerful example of what highly specialized teams can achieve when aligned around a clear objective.
From Knox to AFS
Despite successfully obtaining a license and building the platform, Knox faced a familiar challenge for many financial infrastructure projects: funding.
Regulatory delays and technology development extended timelines and increased investment requirements.
While the underlying business model remained sound, the capital needed to continue scaling the platform became increasingly difficult to justify for existing investors.
At the same time, AFS Group had already identified custody as a strategic area for future growth.
The two organizations found strong alignment.
Rather than continuing independently, Knox was integrated into AFS Execution Services, combining custody capabilities with AFS's broader brokerage and trading infrastructure.
The transition allowed the platform, technology architecture, and expertise developed within Knox to continue growing within a larger organization.
Why Custody Became Strategic for AFS
Today, custody forms an important part of AFS Group's broader financial services offering.
The combination of execution services, custody infrastructure, trading venues, and capital markets expertise creates opportunities that extend beyond traditional asset servicing.
One example discussed in the episode is AFS's work supporting crowdfunding platforms.
By combining custody services, bond issuance capabilities, payment administration, corporate actions processing, and secondary market trading through its Multilateral Trading Facility (MTF), AFS can support the full lifecycle of certain financial instruments.
This integrated approach reflects a broader trend across financial services.
Infrastructure providers increasingly seek to combine multiple services into a single ecosystem rather than operating as standalone providers.
"The combination of custody and tradability is a unique concept." - Pieter Aartsen, Managing Director of Execution Services, AFS Group
For AFS, custody is not simply a standalone business line. It is an important building block within a larger growth strategy.
Lessons for Building in Regulated Markets
Towards the end of the conversation, Pieter reflects on what entrepreneurs and financial services professionals can learn from the Knox journey.
His advice centers on one recurring theme: understanding regulation deeply.
In highly regulated industries, innovation often comes from interpreting new rules and identifying opportunities that others overlook.
Rather than viewing regulation as a constraint, Pieter believes it can become a source of competitive advantage for organizations willing to invest the time required to understand it.
"Read a lot about new rules and regulations and try to be the first." - Pieter Aartsen, Managing Director of Execution Services, AFS Group
Combined with strong product expertise and a capable team, this mindset can unlock entirely new business models and market opportunities.
The creation of Knox serves as a compelling example of exactly that.
Topics Covered in This Episode
- The origins of Knox and why 25 asset managers supported its creation
- What it takes to build a custodian from scratch
- The regulatory challenges of launching a non-bank custodian
- Asset segregation and investor protection in custody services
- Building custody technology and infrastructure from the ground up
- Managing operational resilience with a lean team
- Why Knox was acquired by AFS Group
- How custody fits into AFS's long-term growth strategy
- The role of custody in modern financial infrastructure
- Lessons for entrepreneurs building businesses in regulated industries
Watch the Full Episode
Watch the full conversation with Pieter Aartsen to learn what it takes to build a custodian from scratch, navigate complex regulation, and create critical financial infrastructure in the modern wealth management industry.
About the Guest
Pieter Aartsen is Managing Director of Execution Services at AFS Group. Prior to joining AFS, he led the creation of Knox, a Dutch custodian established to serve independent wealth and asset managers. Throughout his career, Pieter has been involved in launching new financial infrastructure businesses, including trading venues, pension solutions, and custody services, with extensive experience across regulation, operations, and market structure.
About Wealth Insider
Wealth Insider is a podcast by Performativ exploring the strategies, technology, and people shaping the future of wealth management. Each episode features candid conversations with leaders across investment management, private banking, fintech, and financial regulation.
