Although the price of transfer agent services should not be the most important factor in your decision, it should be taken into account. When you consider a transfer agent’s pricing, very low prices could signal outsourcing, poor service quality or a small under-equipped transfer agent trying to break into the industry. Extremely high prices may reflect the brand recognition of a well-known transfer agent rather than representing real value to you. Value pricing in transfer agent services represents a clear relationship between the transfer agent’s fees and the actual time and effort necessary for the transfer agent to properly fulfill administrative operations.
Transparent pricing for transfer agent services is important. Questions to ask:
- How do you charge for your services of a transfer agent?
- Do you charge by the percentage of assets under management, the number of investors or based on time and effort?
- Do you charge separately for different transfer agent services or do you charge a flat rate for everything?
- How does the price of your transfer agent services change when my fund increases in size or when more funds are added?
- Is your pricing structure straightforward and easy to understand?
Pricing is an important consideration if you want to spend your transfer agent dollars efficiently on behalf of your investors.
A transfer agent’s pricing model matters. Here’s why:
- Larger transfer agent businesses may not provide the same level of service to their smaller transfer agent clients as they do to their larger transfer agent clients. You don’t always get what you paid for.
- You don’t want to pay for poor service and frequent errors because you engaged a low-cost transfer agent.
- More than just money should drive your connection with your transfer agent partner.
- Compared to building out your own in-house transfer agent team, pricing for outsourced transfer agent services should represent a significant savings while providing professional service to investors.