Who is a Fund Administrator?

Who is a Fund Administrator?      

As the name suggests, a fund administrator is an individual or a company in charge of an investment fund. In this case, a fund is a pool of money owned by several investors who use it collectively to purchase securities such as bonds and stocks, among other assets. Unlike when working as an individual, the investors in such an arrangement have a myriad of options as far as investment opportunities are concerned. Let’s dive into the responsibilities of a fund administrator in detail.

The Role of a Fund Administrator

A fund manager is responsible for a wide range of services, including the following:

• Offering investor service
• Supporting tax return and audit
• Maintaining the investor capital account
• Financial reporting
• Distribution processing
• Capital call
• Partnership accounting

Things to consider when choosing a fund administrator

Given the crucial role of a fund administrator, choosing the wrong person for the job can be suicidal for any business. Fortunately, you can use these tips to make the proper selection.

• Keep in mind that sometimes cheap is expensive. Therefore, instead of only focusing on the price they are charging you, consider other things. For instance, think about the years of experience and the reputation in your industry.
• Choose a popular fund administrator to attract partnerships with people who can only if a third party is involved in the administration. It also attracts investors who don’t like investing in a first-time fund.
• Talk to his previous or existing clients to learn more about their experience with the fund administrator before settling for him.
• The fund administrator should also have strategies for incorporating technology. It would be a bonus for him to have platforms suitable for investors and customizable to fit various needs.
• Identify the process he practices during service delivery. Look out for his adherence to the previous service-level agreement (SLA). Find out if the onboarding process is documented and how well it is done. Investigate if they carry out meetings and status calls and, if yes, how often.
• Find out if they are compliant with the System and Organization Controls (SOC) Type 2 compliance. If yes, that’s a plus as it indicates having passed an audit of its internal operations. The audit checks if these operations manage client’s data in the right way. The parameters include privacy, confidentiality, processing integrity, availability and security.

Advantages of choosing the right fund manager

If you hire right, the fund manager will lead to several benefits. They include

• Reducing risks
• Increasing your focus on the sourcing and management of investments
• Improving your reputations

Consequences of choosing the wrong fund manager

Getting it wrong when hiring a fund manager also has dire consequences. Check them out!

• Hindrance to the scalability of your firm
• Disruption of operations
• Adverse effect on investor relations
• Jeopardizing compliance

Conclusion

It is evident that a fund manager plays a huge role in a business. He does crucial roles that can make the company thrive and become successful. Therefore, there is also a need to choose the best. While selecting, consider the factors discussed above to settle for a suitable fund manager. Remember that choosing right has its benefits, whereas choosing wrong has its consequences.