The benefits to investment funds of outsourced fund administration are many and varied. The general benefit of relieving management of the distractions of fund administration tasks is incalculable. But here are a number of specific ways that third-party fund administration services simply benefit the bottom line.
Payroll Savings and Efficiency
A full-service fund administration provider utilizes advanced and integrated fund administration and accounting systems that coordinate in real-time for capital calls, distributions, tax form production, compliance reporting and investor transparency via mail, email or web portal delivery. This optimizes data flow, maximizes data security and reduces the cost of every fund administration function.
Audits Specialization and Reputation
By migrating fund administration functions to a third-party provider, in-house staff can be re-deployed to activities that contribute to enhanced returns. Additionally, a fund administration partner that is able to provide sales reporting, financial reporting, web portal solutions, fulfillment services and investor/advisor phone support helps to support and empower these activities – magnifying the benefit of reassigning the in-house fund administration services staff.
Experience and Economies of Scale
Smooth effective fund administration services avoid regulatory action. An experienced and engaged fund administration services firm can call fund management’s attention to potential red flags, avoiding costly mistakes and violations. An advanced transfer agent will establish procedures and policies that keep funds from avoidable mistakes, saving the time, cost and disruption of regulatory inquiries.