The Investor Experience: How an Effective Transfer Agent can Help Managers Grow

May 02, 2023
  • Investor Services
BBH’s Denise Mak and David Weibe explain how the transfer agent, as a natural extension of the asset manager’s operating model, can facilitate an investor experience that is key to enabling growth.

At the start of the business day in Hong Kong, a local investor opens an email from a Luxembourg fund’s transfer agent, requesting a long list of account onboarding documents. The investor, who might be less familiar with the legal obligations of the fund domicile, queries the transfer agent (TA). They must wait for a response overnight or they contact a local TA who may not have the appropriate Luxembourg fund expertise. Either scenario can result in frustration for the investor and delay their investment.

Better connectivity could help to avoid such scenarios. When embedded properly into an asset manager’s operating model, a truly global TA that operates one universal system infrastructure can provide a differentiated client and investor experience that maximizes the manager’s growth potential.

How important is the TA in enabling growth?

Denise: We hear from our fund clients that the investor experience and overall ease of doing business is critical to the manager’s ability to grow assets. At the same time, compliance with an ever-increasing regulatory framework is a must.

Investors can be from different geographies, time-zones, with different cultures and languages. Investing in a globally distributed fund often means there will be a need for the TA to individualize the level of attention and communication so that the investor remains confident in their decision to invest in the fund. Being proactive can make a huge difference in the investor sentiment and overall experience.

How can working with a good TA improve the investor experience?

Denise: A good TA understands the client, the fund domicile, the fund investors, the distributors, and the markets where the funds are distributed. This matters when building a TA support model that is thoughtful and fit-for-purpose, that not only aligns with the client’s strategy, but is also agile enough to adapt and evolve to the future demands of the fund investors and local regulatory framework.

At BBH, the Investor Relations Manager (IRM), serves as a single point of contact for the fund, their investors, and their distributors. The IRM has accountability over the day-to-day service experience and a deep understanding of the fund register and distribution strategy, which allow for a proactive approach in aligning the service across a global TA team. In addition, the IRM seeks to provide insights to our clients that can help navigate complexity in product innovation, market-specific dynamics, and identify opportunities to enhance the quality of interactions with the investor.

What role does technology play? 

David: Getting the technology strategy right is paramount to the investor experience. Technology can be viewed through three core lenses:

  1. Digitally connecting the dots to create a level of intuitiveness and transparency that creates simplification for the asset manager and investor
  2. The ability to scale an operation to a set of tightly controlled standards at the highest quality
  3. Ensuring full compliance to the local regulatory framework of the fund

The backbone to a successful and value generating TA technology strategy is a robust yet agile platform that facilitates automated processes through a digitalized data set and codified ruleset. The shift from a historically paper-based environment to a digitalized model allows for more innovative ways to scale the business, leading to consistency, quality and transparency. Platforms powering such data innovations give our clients real time access and transparency to some of the most critical processes impacting their investor experience.

The TA’s ability to present a real-time single source of truth is extremely powerful as it synchronizes a set of processes across the asset manager, the TA, and the investors and distributors. The information made available through our digital platform allows the asset managers we work with to make informed decisions, whether that be from an oversight or regulatory perspective or providing jointly high-touch servicing to investors and distributors.

The addition of further digital solutions to the existing platform, such as BBH’s Investor Document Uploader (IDU) and KYC Assist, provide a level of real time transparency made possible by digital investor records. The digitization of the investor record brings further efficiencies and demonstrates alignment with market requirements to support our clients’ business and help them grow.

How does the TA balance the significant and evolving AML and KYC requirements with the needs of the investor and optimizing their experience?

David: An effective TA can ensure the regulatory requirements of the fund are met while making things as investor friendly as possible. This happens easily when the TA communicates clearly to the fund and its investors about not only what information is required but why. An effective TA also provides additional layers of support to investors when necessary to preserve a positive investor experience.

For example, the path to a complete and compliant investor account may not always be a straight line depending on the complexity and profile of an investor. There may be multiple ways to get the investor to the finish line without sacrificing regulatory and reputational risk. The ability to proactively understand and articulate a sound approach demonstrates the domain expertise of an experienced global TA.

How can BBH as a TA provider help?

David: We work proactively with our Product and TA AML/Sanctions and Regulatory Product teams to ensure things align not only from a regulatory perspective but also address market needs and pain points.

For instance, we know that our fund clients may have differing views on the risk level when distributing in certain countries based on their own unique local experience or business profile. We can support customized country risk ratings within our investor onboarding system so that the automated risk assessment and investor due diligence processes align with the client’s own risk appetite.

Our operating and service model aligns with clients’ and investors’ time zones, and our teams based in Dublin, Luxembourg, Poland, the U.S., and Hong Kong, also support their needs. Our transfer agency services cover fund products established in Luxembourg, Ireland, U.K., U.S., Cayman, Bermuda and Hong Kong. This coverage enables us to serve as an extension of our fund managers’ teams by white labelling mailboxes, hotlines, and equipping ourselves with deep knowledge of the funds to respond on our clients’ behalf.

Where enhanced real-time escalation and support is required for a particular investor or distributor, we can quickly engage our experts in all time zones to provide the appropriate perspective and potential solutions to ensure that all required local regulation is being met.

We strive for that all important balancing act, which ultimately leads to a positive result for the asset manager, ourselves, and investors, which we call the ‘ideal BBH TA Xperience’.

For more information, please contact David Weibe, Denise Mak or any of our Transfer Agency experts.

BBH can provide transfer agency services to fund products established in Luxembourg, Ireland, U.K., U.S., Cayman, Bermuda and Hong Kong. Click here for more information.

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