The Benefits of Switching Fund Administrator

Why is it so critically important to partner with the right fund administrator? Can levels of service really differ that much from firm to firm? Why is your relationship with your administration team key to the success of your fund?

Jersey is a leading funds jurisdiction, boasting more than 50 years’ experience in structuring, managing and administering funds. Fund administrators in Jersey provide exceptionally high standards of service and governance, drawing on a large pool of expertise and knowledge. But delve a little deeper and you’ll find that the way fund administrators operate and deliver their service varies significantly.

Why do fund managers switch fund administrators?

In our experience, this is most likely because of one or more of these factors; lack of transparency, high fees, and deteriorating service levels. Response times may be slow and it may be challenging to communicate with the administration team. It may be that the firm hasn’t invested in technology and that reporting software is outdated or there is no investment in the team and resources, leading to lack of consistency of contacts, high staff turnover or lack of expertise. Complex operating models and global outsourcing models with overseas touchpoints can also have an impact. As a fund administrator’s role is to protect the interests of investors by independently verifying the assets and value of the fund, as well as ensuring financial and legal compliance, it is absolutely key that you are working with the best possible administration partner.

How to assess your current fund administrator and address any red flags early on

It’s important that your fund administrator has the right level of expertise, specifically in administering funds in your sector. A high quality administrator will invest in technology and infrastructure and you’ll receive detailed and regular reporting as a result. The team should be set up in a way that ensures it can deliver on your requirements and the dynamic is monitored, removing any risk associated with people moves and performance issues. Changing administrator is much easier than discovering problems further down the track.

Is the grass greener? At what point does it make sense to look elsewhere? You need to ask if yourself if you are happy with the service you are receiving or do you consider it simply best practice to review the administration options available periodically? Do you carry out reviews of service level expectations with your team and monitor the number of red flags / issues raised? We encourage all our funds and corporate clients to speak with Fairway regularly – a benefit of our director-led service offering, and to review the support and engagement they are receiving. It’s important to have an open and transparent relationship.

What should you look for in a new fund services provider?

• Communication is key. You need to meet the team who will be responsible for your administration, find out how they communicate and if it is compatible with the way your team works.
• Is the team director-led? All of our fund administration teams at Fairway are director-led, which ensures expertise and experience is always at the fore. This means we have senior level accountability, and this approach also means our teams have their go-to senior team member on hand day to day, with in depth knowledge of their clients and their funds.
• What are your expectations around responsiveness? Draw up a service level agreement in advance that ensures expectations are understood, and activity is undertaken to agreed timeframes.
• Continued investment in technology is also key – not just for the delivery of robust reporting but also for security and managing cyber risk.
• Always request references for your own due diligence and compliance. Does the team have a proven track record and can they be endorsed by clients who are in the same sector – ensure the administration team has the relevant expertise and skill to work with you.

How to ensure a seamless fund migration

We recommend the Fairway approach – this is what genuinely sets us apart from other fund administrators. We always provide a detailed plan for the transition, including timelines, milestones, and contingencies. Our approach means there are no interruptions in the reporting requirements and minimal disruption to investors. We take responsibility for the end-to-end process, providing you peace of mind that deliverables and timelines are adhered to, keeping you updated every step of the way. Fairway has extensive knowledge and experience in dealing with client take-on and transfers-in and we follow a step-by-step approach so should you be migrating more than one structure we follow the same familiar formula. Choosing to transfer your fund administration is a significant decision, but the process need not be an arduous one.