The Global Custodian Mutual Fund Administration Survey 2009

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  The Global Custodian Mutual Fund Administration Survey 2009 is now in its eighth year. Despite adverse market conditions, it saw a large increase in the number of responses received, which were up more than 50% on 2008 to 440.

  
  

  Mutual funds have been hit hard over the past year. The international mutual fund industry fell from USD24 trillion in Q1 2008, to USD19 trillion in Q4.

  
  

  In this tough environment, the survey aims to enable users to find providers that can best meet their individual requirements, and assess them on the basis of their particular strengths and weaknesses. However, it is possible to identify service areas in which the industry as a whole needs to see improvements.

  
  

  Fund reporting is chief among them. It is a service area in which overall average scores have remained static for the last three years, and in which there are large variations in scoring by providers. One respondent said his administrator is "shaky in providing reports," while a second respondent said, "we have never been able to automate reporting to fund accounting/admin area."

  
  

  Even those administrators that do get it right still fall short of the mark. "Reporting service by [the administrator] is unbeatable," a client writes. "Indeed, it is very accurate and flexible-only problem is the format. If it [were] a commonly used format rather than [a] specific format just for [the administrator], that would be even better."

  
  

  The fact that the average provider scored even less for value than reporting was one of more predictable findings of the survey in such demanding market conditions. However, 2009 did see noticeable improvements in the scoring of providers in the key service areas of fund accounting and transfer agency.

  
  

  There has been considerable change in the global league tables since the 2008 survey. Although PNC Global Investor Services (then PFPC) and RBC Dexia remain in the top three, State Street has risen through the ranks from sixth to first.

  
  

  With more than half as many respondents as its nearest rival, State Street lifted its average scores by significant margins in every service area and all but two of the 46 questions posed.

  
  

  League Table: Global
  Provider	Weighted average score
  1. State Street	5.77
  2. PNC Global Investment Services	5.75
  3. RBC Dexia Investor Services	5.62
  4. Citi	5.62
  5. Brown Brothers Harriman	5.55
  6. HSBC Securities Services	5.40
  7. BNY Mellon Asset Servicing	5.34
  8. J.P.Morgan	5.19

  
  

  Methodology

  
  

  The questionnaire remained unchanged from last year, allowing for complete consistency in comparisons between providers and scores across the past two years. In addition to general questions designed to help us understand the business profile of each respondent, the survey questionnaire included 46 rating questions that covered the following eight service categories: Client Service and Relationship Management, Value, Fund Accounting and Valuations, Transfer Agency, Distribution Support, Portfolio Servicing, Fund Reporting, and Compliance. Respondents graded the quality of service on a scale of 1 to 7, where 7 is excellent; 6, very good; 5, good; 4, satisfactory; 3, weak; 2, very weak; and 1, unacceptable. Scores were then weighted for the size and sophistication of the respondent and for performance on questions named as important in each service area by all respondents.

  
  

  The full results of the Mutual Fund Administration survey, and a full explanatory methodology, can be accessed by subscribers here.

  
  

  Full research reports are available from Muzaffar Karabaev, Director of Research at Global Custodian.

  
  

  Contacts:

  
  

  Dominic Hobson, Editor in Chief, at dhobson@globalcustodian.com or
  +44 (0) 207 228 3013

  
  

  Allison Cayse, Surveys Editor, at acayse@globalcustodian.com or
  +1 513 574 0220

  
  

  Muzaffar Karabaev, Survey Reprints/Research Enquiries, at
  mkarabaev@globalcustodian.com or +44 (0) 207 148 4289

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