30 January 2025 How to successfully transfer Fund Administrators: A step-by-step guide

Changing a fund administrator is a complex and bespoke operation that requires meticulous management  to maintain stability and operational efficiency of an investment fund. Good governance is critical to managing this transition smoothly, ensuring that all stakeholders are aligned and that the fund's operations remain uninterrupted.  

We have successfully onboarded a number of fund mandates, the latest being a FTSE 250 London-Listed investment company. Using our expertise, we have highlighted seven crucial steps to a successful transition, underscoring the importance of governance during such a transition. 

1. Initial assessment of service providers 

The journey of changing a fund administrator begins with a thorough initial assessment of potential service providers. This evaluation must consider a range of factors including the provider's reputation and people, operational stability, experience in the specific asset class, technological capabilities, and the quality of their client service. It is imperative that the selected administrator aligns with the fund's strategic goals and possesses the requisite expertise to handle the fund's unique requirements efficiently. 

2. Formal approval of the change decision 

Once a suitable service provider has been identified, the next step involves securing approval from the fund's board and/or manager. This stage is critical for ensuring that all key stakeholders are in agreement with the decision to change administrators. The board should be presented with a comprehensive plan that outlines the benefits of the new provider, the risks involved, and the mitigation strategies in place. Their approval signifies a unified direction and commitment to the transition process. 

3. Timing of the handover 

Timing is a crucial element in the handover process. It requires careful consideration of key events such as the fund's financial year-end, audit schedules, accounts distribution timings, and other significant corporate events. Coordinating the handover to minimise disruption during these periods is essential. For instance, avoiding transitions during peak audit times can prevent delays and ensure that the fund's reporting obligations are met without complications. Strategic timing helps in maintaining continuity and safeguarding investor confidence. Having fall-back dates for contingency planning is also worthwhile.

4. The benefit of project management throughout the transfer 

Effective project management is the backbone of a successful administrator transition. Appointing a dedicated project manager or team ensures that all aspects of the transfer are meticulously planned and executed. This includes setting clear timelines, assigning responsibilities, monitoring progress, and addressing any issues that arise promptly. A structured project management approach ensures that the transition is carried out systematically, reducing the risk of oversight and ensuring that all regulatory and operational requirements are met. 

5. Information sharing using secure online portals 

In the digital age, cybersecurity threats cause a significant concern. Selecting a fund administrator with robust security processes and secure online portals in place is an indispensable factor in transferring information  during the transition. Portals provide a secure centralised platform where all relevant data and documents can be accessed by authorised personnel. This not only enhances transparency but also ensures that sensitive information is exchanged securely, mitigating the risk of data breaches. Effective use of technology in information sharing streamlines communication and keeps all stakeholders informed and aligned 

6. People integration to build new working partnerships 

Integrating individuals from the board and investment manager with those of the new provider is essential for building effective working partnerships. Clear communication of roles and expectations, providing training where necessary, and fostering a collaborative environment is often the most important aspect of the transition. Establishing personal connections between the teams enhances cooperation and ensures that the transition is not just a procedural change, but the creation of a cohesive partnership. 

7. Establishing communication and working relationships 

At Oak, we embody building lasting relationships through honesty, transparency, and accountability. This is the foundation to a successful transfer and beyond. Regular updates and meetings should be scheduled to keep all parties informed of progress and any issues that need addressing. Establishing strong working relationships from the outset sets a positive tone for ongoing collaboration. It ensures that any challenges are swiftly resolved and that the fund can continue to operate efficiently without interruption. 

Conclusion 

The change of an administrator for an investment fund is a significant event that requires thorough planning and robust governance to ensure its success. From the initial assessment of service providers to the establishment of new working relationships, every step must be carefully managed to maintain stability and continuity. Good governance practices not only facilitate a smooth transition but also uphold the trust and confidence of investors, ultimately contributing to the long-term success of the fund. 

With Oak’s success in onboarding several fund mandates, utilising the team’s experience and technical skills, we are in prime position to support managers who are considering how they can better serve investors through a trusted relationship with their service provider. Oak understands the importance of governance during a change of administrator, and we engage proactively and transparently to build trust and manage operational risk throughout the transfer process.  

Get in touch with James Christie or your usual Oak contact to find out more information on Oak and how we can help your fund change administrator. 

Find out more about our fund administration services here.