I have a client who has a nonleveraged ESOP and they currently have individual trustees. They are changing recordkeepers and are considering acting as custodian of the stock certificates held by the ESOP themselves. I wanted to try and explain the ramifications of safeguarding the assets themselves. Does anyone know of any good articles that discuss this or can you give me a brief outline of the issues they would be running up against?

This may be too general, but try:

http://www.benefitslink.com/articles/trustee.html

If the stock is closely held, your client would be well advised to have an experienced corporate trustee review the annual appraisal of the stock. I'm assuming they already have ERISA counsel who drafted the ESOP.

The custody of the stock certificates is almost trivial. Certificates should be held by the trustee. They may be held by another custodian under a custodial agreement between the custodian and the trustee, but that seems like unnecessary work. The issue of who serves as trustee or other fiduciary and how they perform is a very important and much more complex.