By Eric Schultz, Founder & Managing Member, Reliant Fund Services
In a recent LinkedIn article, Eric wrote on how emerging fund managers are hiring a fund administrator with no prior knowledge of working with them, and without knowing what exactly to look for.
Because of that, a lot of fund administrator searches come down to pricing, technology, or references. Those things matter, but they don’t show you how the administrator actually operates.
They don’t tell you who reviews the work, who owns coordination when something goes wrong, or how much responsibility ends up back with you after the engagement begins.
After 30 years in this space, I’ve seen more times than I can count how the right administrator changes how a fund manager spends their time. The wrong one adds operational work back to the GP, often in ways that weren’t obvious at the signing stage.
What to confirm before you start evaluating
Before you evaluate anyone, confirm they have a current SOC 1 Type II report.
It provides independent verification that their controls have been evaluated and tested over a defined period. If a provider can’t produce one, that’s a disqualifier before the conversation goes any further.
Once that baseline requirement is satisfied, the questions below help you understand how they actually operate.
10 questions that reveal how a fund administrator really operates
Question 1: Who will actually be working on my account?
What you see in the sales process is not always what you get once the engagement starts.
- Can I meet the people who will work on my account day to day?
- What is the typical tenure of the team?
- Will I have direct access to senior personnel, including a director or partner?
Question 2: Who is the quarterback for my back office?
This is a different question from who is working on your account. It’s about ownership of coordination across fund accounting, investor reporting, capital activity, management company operations, audit support, tax support, and other providers when issues arise.
If the answer is “you,” you should know that before signing.
Question 3: What specifically falls outside your scope, and who owns it?
Every fund administrator has a defined scope.
You want to have a clear picture of what falls outside it, and who picks it up.
- Do you handle management company accounting? If not, who typically does?
- What does cross-vendor coordination look like?
- Who is responsible when something falls between providers?
- Can you give examples of responsibilities commonly handled by the GP?
Question 4: Will my account be handled by U.S.-based professionals, offshore professionals, or split across multiple departments?
This question is about more than geography. It’s about how information flows between teams and who is accountable when it doesn’t.
- Which functions are handled by which teams?
- Will I work with a dedicated team or multiple functional groups?
- How does information get shared between those groups?
- Who is responsible for making sure nothing falls between them?
Question 5: What controls exist around cash movements and approvals?
Cash controls are worth understanding in detail before the engagement begins.
- Who sets up wires?
- Who reviews wires?
- Do you have authority to release funds, or are all cash movements approved directly by the client?
- Who authorizes cash payments?
Question 6: How are deliverables reviewed before they reach me?
You want to understand who is responsible for catching any errors before it reaches you.
- Who prepares the work?
- Who reviews it?
- How many layers of review exist?
- Does the same person ever prepare and review deliverables?
- How are open items identified, tracked, and resolved?
Question 7: What does a month-end and quarter-end close look like on my end?
Even with a fund administrator in place, there will be things that require your attention each period.
- What will I receive and review?
- What am I responsible for approving?
- What is the standard turnaround time?
- How much time should I realistically expect to spend each month?
Question 8: What changes during audit and tax season?
Every provider looks good in July. The real test is January through April.
- Will I have the same team and the same response times?
- Will there be the same level of senior involvement?
- How do you make sure quality doesn’t decrease when workloads increase?
Question 9: Tell me about a recent mistake.
Any provider should be able to answer this. You want to know:
- How was it identified?
- Who communicated it?
- How was it resolved?
- What changed afterward?
Question 10: Can you provide two client references?
Not a general reference. Ask to speak with two clients that have a similar fund structure and have already completed at least one audit with the provider.
Why getting this right matters
The goal is to understand who owns the process from beginning to end, how work gets prepared and reviewed, and how much coordination and responsibility ultimately falls back on you after the engagement begins.
That’s what will determine how you spend your time.
In many cases, fund managers don’t fully realize the answer to that question until they’re already in the relationship. By then, switching administrators is a significant undertaking.
Asking the right questions now is a lot easier than correcting the wrong choice later.