How Transfer Agent Services Save You Money

Beyond relieving management of the distractions of transfer agent tasks, there are a number of specific ways that third-party transfer agent services simply benefit the bottom line.


How Transfer Agent Services Save You Money

The benefits to investment funds of outsourced transfer agent services are many and varied. The general benefit of relieving management of the distractions of transfer agent tasks is incalculable. But here are a number of specific ways that third-party transfer agent services simply benefit the bottom line.

1. Payroll Savings

The costs and complications of maintaining an in-house staff for transfer agent functions only magnifies as your fund succeeds and grows. Recruiting, training, sick time, vacations, employee benefits and paid leave are considerable expenses and unnecessary headaches for a successful and expanding office. Hiring and firing, overstaffing and understaffing are ongoing and expensive challenges that impede consistency in in-house transfer agent teams. A quality third-party transfer agent services provider gets all the back-office tasks done with professionalism, at a considerable savings and without human resources issues for management.

2. Efficiency in Transfer Agent Processes

Specialized transfer agent systems in the hands of trained and experienced operators accelerate and streamline every transfer agent function. Hours spent on new investment entry, resolution of errors, reporting, maintenance, transfers, distributions and commission calculations are minimized leveraging professional transfer agent services. Controls built into transfer agent systems that apply data uniformity, minimize errors, track activity and provide audit trails also enhance efficiency. Far more gets done at a lower cost per task utilizing an outsourced transfer agent team.

3. Integration of Services

A full service transfer agent services provider utilizes advanced and integrated transfer agent 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. This optimized data flow maximizes data security and reduces the cost of every transfer agent function.

4. Audit Savigs

Auditors price their services based on each client’s history of organization and timely preparedness for their audit. A transfer agent services provider delivers prompt scheduled delivery of accurate and flexibly available data making the audit process more efficient, less disruptive and less expensive for fund management. The experience of a transfer agent firm with meeting the audit requirements of many client funds makes the process a straightforward matter of routine.

5. Transfer Agent Specialization

An appropriate division of labor means all parties focus on their core competencies. A transfer agent services provider focuses on performing administrative functions and keeping up with industry regulations, trends, requirements and best practices on the transfer agent side so fund management can focus intensely on sales and investments. This minimizes operational risk and the costs and distractions associated with responding to unforeseen issues on the transfer agent side.

6. Reputational Savings

Professional third-party transfer agent services make an impression. Investors, financial advisors, auditors, institutions and regulators notice when everyday activity is prompt and accurate, questions, requests and requirements are addressed swiftly and knowledgeably and deliverables are of high quality and professional appearance. Professional transfer agent services help fund management acquire a reputation for stability and excellence. When both investment return and operational responsiveness from the transfer agent excel investors feel confidence in their investment choice. Such a reputation encourages reinvestments and referrals of new investments.

7. Enhanced Productivity

By migrating transfer agent functions to a third-party provider, in-house operational staff can be re-deployed to sales, research or other activities that contribute to generating returns. Additionally, a transfer agent partner that is able to provide sales reporting, financial reporting, web portal solutions, fulfillment services and investor/advisor phone support helps to empower these activities – magnifying the benefit of reassigning the in-house transfer agent staff.

8. Compliance Savings

Smooth effective transfer agent services avoid regulatory action. An experienced and engaged transfer agent 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. A transfer agent systems should be able to automate AML, KYC, OFAC, FATCA and other compliance requirements on the investor side while monitoring compliance with regulations, limitations and investor restrictions on the asset side. The transfer agent’s ability to track and support compliance requirements helps control costs and empowers the fund to scale smoothly.

9. Gained Industry Knowledge

The experience of a transfer agent firm allows client funds to skip steps and streamline functions. Since a seasoned transfer agent services provider has learned from the experience of many clients, funds can benefit from the experience of others rather than make avoidable mistakes and learning hard lessons themselves.

10. Economies of Scale

Transfer agents allow client funds to benefit from the centralized processing of one provider for many clients. The economy of scale not only concentrates transfer agent experience and knowledge where it does the most good – it reduces the hourly cost of all transfer agent tasks and eliminates the waste associated with salaried in-house transfer agent staff with more paid time than tasks to perform.

From the inception of a fund or at any time thereafter, the decision to partner with an experienced transfer agent firm is a smart investment. Outsourced transfer agent services is an investment in efficiency, management focus and smoother relationships with all parties, with many real benefits to the bottom line.

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