WHAT TO CONSIDER IF CHANGING FUND ADMINISTRATOR
Moving fund administration is a process, but it doesn’t need to be a difficult one. Reasons for switching often cited are lack of investment in the business, poor client service, inability to react to new regulatory developments, lack of flexibility and cost. Cost issues aside, Centaur outlines four points to consider if you are looking to change administrator:
There is no doubt that cost and the ability to service often complex products are important considerations when choosing a fund administrator. However, relationship-based factors such as client service and reputation are also vital to the long-term partnership between a fund, investment manager and administrator.
At Centaur, we believe we are entering an era where administrators must take accountability for their actions. In the last couple of months, a US based investment manager received a CFTC fine for failing to supervise diligently its fund administrator’s operation of a fund bank account. Managers can remove this risk by engaging administrators, like Centaur, that sign up to detailed deliverables in legally binding agreements to ensure that their funds are managed appropriately.
2. SYSTEM SOPHISTICATION
Savvy fund managers are demanding technology maturity from their fund administrators. Leading-edge technology is critical in helping administrators to deliver their services to clients. Better processes, impregnable security and clients’ needs should always be at the forefront of their thinking. Apart from regulatory events and financial market conditions, the risk of cyber security threats is on the rise and any administrator worth its salt ensures that cyber risk is proactively managed through informed decision making within each level of their organization.
Independent administrators provide focused and unbiased services to funds and investment managers. As fund administration is Centaur’s core business, we invest constantly in our platform to meet the evolving needs of our clients. With a sole focus on administration, there are no potential conflicts of interest across company divisions. Selecting an independent fund administrator means there are no side businesses or competing services to distract the administrator from its goal of providing clients with the best processes and people. Also, with independence comes flexibility. Independent administrators such as Centaur respond faster to technology and regulatory changes, which puts them at the forefront of innovative thought.
4. SMOOTH TRANSITION PROCESS
Last but by no means least, if a fund or an investment manager makes the decision to switch administrators, the transition should be as seamless as possible. Dealing with a dedicated transition team is the first step in building the working relationship between a manager and a new administrator. A smooth process built on the back of a detailed plan can allow a fund to upgrade its administration services with no interruption in the reporting requirements and minimal disruption to investors.
Switching to Centaur is a smooth, seamless and hassle-free process. Our dedicated teams ensure the transition of service is both efficient and effective. This is why we have successfully transferred in excess of 150 funds on to our platform over the past five years.