What do we want from the transfer agent service provider?

Abstract

Until the late 1990s, transfer agent (TA) work was seen as a secondary activity in the fund accounting-custody chain. TA service providers typically earn relatively low fixed annual fees and a small charge per transaction. As such, they have suffered from a lack of investment in specific TA systems. This paper will examine how the most recent changes in product and distribution dynamics are creating new dynamics in the TA industry. It aims to assess the progress obtained in the automation of core TA functions and the existing potential for the development of new added-value TA services. It will attempt to answer the question of whether TA is still a necessary cost of doing business from a fund administrator and custodian perspective, or whether it is becoming a business line in its own right.