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Streamlining Fund Transitions

Streamlining Fund Transitions

Transition Funds

Dublin / New York, June 18, 2024

Transitioning fund administration is a critical step for any fund manager. It involves meticulous planning, clear communication and strategic implementation. In this article, we provide practical solutions to streamline the process, ensuring a smooth transition that aligns with your operational goals and regulatory requirements.

Key Drivers to Switching Fund Administrators

There are many reasons for switching fund administrator. Improved service levels, costs and better support are major drivers. A new administrator may offer more personalized attention and faster response times, enhancing client satisfaction. Better technology solutions can streamline operations, improve data accuracy, and enhance reporting capabilities, leading to greater efficiency and reduced operational risks.

Other reasons include a stronger focus on regulatory compliance to ensure all requirements are met. Additionally, meeting investor demands for transparency and operational excellence may necessitate a switch to an administrator who can deliver on these expectations.

Steps to Ensure a Smooth Transition

A successful transition relies on a structured approach and careful execution. The following steps are key to ensure a smooth transition:

  1. Service Level Goals:
    Your new administrator must establish clear objectives for each transition phase. An effective transfer timetable should be agreed upon to minimize service disruption and the administration agreement should be prepared and agreed upon. Additionally, all necessary regulatory reporting requirements must be identified and agreed on.
  2. Knowledge Transfer:
    A dedicated client service team should be assigned to work with the outgoing administrator. This team should understand existing systems and processes, identify areas for improvement, and ensure continuity post-transition.
  3. Data Collection and Integration:
    Integrated technology solutions ensure efficient and secure data handling. A gap analysis should be performed on received data for quality control to ensure compliance with AML and other legal requirements.
  4. Parallel Administration:
    A full operational assessment should be conducted and parallel administration initiated. Regular updates should be provided and any issues resolved promptly to ensure a smooth transition.
  5. Switchover of Administration Services:
    Systems and processes should be tested and reconciled. Clear communication with stakeholders and diligent handling of due diligence will ensure a smooth switchover once all targets are met.

Managing Outsourcing Risks

Mitigating risks is essential for a successful outsourcing strategy. A successful transition focuses on these key areas:

  • Cyber Security:
    Ensure that your administrator implements advanced security protocols, conducts regular audits, and provides comprehensive staff training to protect sensitive data.
  • Regulatory Compliance:
    Your administrator should offer robust reporting and compliance monitoring to navigate complex regulations, mitigating legal risks.
  • Technology Failures:
    Develop effective business continuity plans, including backup systems and regular disaster recovery tests, to ensure smooth operations during tech disruptions.
  • Organizational Changes:
    Ensure flexible and robust change management processes, clear communication, and detailed transition plans to minimize disruptions during organizational shifts.
  • Global Rate Cards:
    Your administrator should offer robust reporting and compliance monitoring to navigate complex regulations, mitigating legal risks.

Karen Malone, Global Product Head at Waystone Administration Solutions, says, “Transitioning fund administration can be complex, but with the right approach, it can be seamless and efficient. By following practical steps and leveraging the expertise of specialized administrators, fund managers can achieve a smooth transition with minimal disruption”.

“Investors are supportive of funds moving service provider to obtain a better level of service and better contractual terms.  The proof is in the numbers: To date, over 50% of Waystone’s administration clients have migrated from other service providers. Success hinges on making the transition smooth and efficient. A detailed plan and a dedicated team are crucial for ensuring a seamless and effective transition to a new administrator.


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