How to Know If Your Company Needs a Fund Administrator

When it comes to establishing your company’s dominance in the industry, one of the things your management should focus on is strengthening your financial strategies – especially when it comes to your wealth management and diversification efforts. As companies expand and scale your operations, your finances become more complex to handle. During this period of growth, wealth management becomes a need.  

 
Wealth management is a company’s capacity to effectively manage their funds and allocate their financial resources towards growth-optimizing ventures, as well as processes in place to keep the company financially stable during times of turbulence. When it comes to effective wealth management – this is the time fund administration comes into play.  

Read: 6 Steps to Find a Reliable Wealth Management Company 

 
 
What is Fund Administration?  

 
Fund administration is the term given to the wealth management efforts done by a third-party service provider for your company. This impartial party assesses your funds, does your fund accounting and financial reporting, and works on determining your net value for wealth diversification and hedge fund initiatives. They are able to shift your finances from passive funds to active high-yielding funds, giving your company additional income.  

As a company, if you see that your operations are beginning to grow and that your revenue has increased to the point that there is a little wiggle room for wealth diversification efforts, then maybe it is time to bring in and see the importance of fund administrators and how they can help your company. 
 
Here are some of the tell-tale signs that your company may benefit from hiring a fund administrator:

 
When to Hire a Fund Administrator

Time-Consuming Fund and Wealth Management 

If you have an in-house CFO and accounting team who have begun their fund and wealth administration efforts, it is a positive change for your company. However, these added tasks may take your in-house accounting team’s time away from their regular tasks such as managing the day-to-day financial operations and duties related to regulatory compliance.  
 

When you start to see your in-house team becoming overwhelmed with their wealth management tasks, then maybe it is time to bring a fund administrator in. Outsourced wealth and fund management services can help increase the efficiency of your accounting team as well as optimize the quality of your wealth management strategies.  
 
 

Complex Fund and Income Structures 

If your company has undergone company structure changes such as being part of a merger and acquisition or expanding to becoming a conglomerate, increasing your operational capacity and the markets you operate in may add some complexity to your financial management. Should your income structure change, the regulatory requirements change as well.  

As your company expands, you may need regulatory compliance with matters such as special-purpose deliveries or cross-border trade – making internal financial management difficult. With this, fund administrators become a huge help.  

Fund administrators specialize in dealing with these kinds of intricate fund and income structures and the paperwork required to handle these structures. They can ensure that every aspect is managed with accuracy and in compliance with the relevant laws, positioning your company to thrive in this new venture.  

 
Lack of Financial Transparency

For companies with various stakeholders such as executives and various investors, being financially transparent at all times is a sign of good faith in business. To increase trust between you and your stakeholders, you can hire fund administrators to create comprehensive financial reports from your day-to-day financial operations to your more complex investment and wealth management strategies.  
 
Your investors would see this attention to detail and accuracy as a sign of a healthy company, encouraging them to further strengthen their relationship with you – positioning you as a company who has the support of your stakeholders to venture out to other markets, expand and/or diversify.  

Increasing Financial Management Costs 

If you find yourself allocating more and more financial resources just to manage your finances, this may also be a sign for you to hire a fund administrator. Aside from their capability to diversify your assets into ventures such as setting up hedge funds, they are also able to holistically assess your finances and offer financial advice and strategies to lessen your operational costs.  

The bottom line is, determining whether your company needs or can benefit from the expertise of a fund administrator lies in your company’s structure, current financial management strategies and company growth plans. If you find yourself starting to struggle in any of these aspects, it may be time to invest in a fund administrator.  

Not only can they handle complex financial structures and reporting, but they can also ensure that your operations remain compliant with regulatory requirements, offering a more efficient and scalable solution for your company’s operations. By partnering with a fund administrator, you can focus on driving your company forward, be confident that your finances remain sound and able to adapt to any changes.  

Read Next: Tips on how to Survive in the Changing Wealth Management Landscape 

Need Reliable Accounting Support for Your Wealth Management Firm?  

The next step to finding a reliable wealth management company is to hire an expert who can help you reach your goals.  Look for someone who is knowledgeable about your financial situation, as well as trustworthy and will keep your information confidential. 
 
You can read more about how we help wealth management firms in our Unlocking the True Potential of Your Wealth whitepaper! 
 
You can also contact us today to see how we can help find the right solution for your needs.