Enlisting the services of a fund administrator is a smart business decision amid today’s increasingly global investment marketplace. Below are five reasons why an investment fund will benefit from having a third party fund administrator:
They act as project managers. At the early stages, fund administrators can perform such vital roles as the structuring and establishment of the prospective fund. They are the ones who can serve as the facilitator, taking on the tasks of liaising with investment managers, brokers, legal and tax counsel, auditors, supervising authorities and notary or registered agent involved in the creation of the fund.
In most cases, fund administrators also carry out the paperwork, such as drafting the memorandum of agreement, financial proposals, among others. They make sure that requested documents are completed thoroughly, and on time.
They act as the unbiased accountants. Accounting remains the core task of fund administrators. That the firm hires an external, independent administrator also would give investors the assurance that performance reports are reliable and free from unnecessary manipulation.
The fund administrator’s ability to effectively manage cloud-based technology and accurate financial database contributes a lot to investor confidence and satisfaction. In Banking 2020’s official website, it is revealed that, “…Some of the best administrators have had their internal quality management systems audited and certified under well-known international quality standards such as ISO and SAS70, providing additional comfort to investors and other parties involved with a fund served by them.”
They act as registrar and transfer agent. Record-keeping of shareholders is another important job performed by fund administrators. A good record consists of the shareholder’s name, address and number of shares owned, updated regularly and accurately. Fund administrators are also responsible for such transactions as processing and control of subscriptions, redemptions, transfer and exchange, among others. If needed, they also provide certificates for the interested parties and have power to cancel old ones. They are well-informed of the client identification procedures like Know Your Client (KYC), among others.
They act as corporate secretary. The good fund administrators can go out of their way to make sure laws and regulations are strictly complied with, and documentations are filed accordingly. They are also the ones who arrange the meetings between the managing Board and shareholders.
They ensure excellent shareholder services. Fund administrators act as the important link between the fund and potential investors, even when they act behind the scenes most of the time. For instance, calculating and relaying Net Asset Values (NAV) to shareholders is typically a task of fund administrators.