Fund Administration vs. Other Financial Services: What’s the Difference?

Published date:  10 March 2025   |  5-Min Read

In the complex ecosystem of investment funds, many financial roles and services overlap, but they are not the same. Understanding where fund administration ends, and other services begin is critical for fund managers, investors, and financial professionals alike. 

In this guide, we break down the differences between fund administration and closely related services like fund accounting, transfer agency, custody, and fund management. We’ll also clarify common comparisons like fund administrator vs fund accountant, and fund administrator vs investment manager. 

A transfer agent is responsible for maintaining investor records and processing transactions related to fund shares or units. 

• Fund Administrators offer broader services including accounting, compliance, and reporting.  

• Transfer Agents focus on: 

• Maintaining shareholder registers 

• Processing subscriptions and redemptions 

• Issuing investor confirmations and statements 

• Handling dividend distributions 

Key Difference: 

Transfer agency is focused solely on investor-related transactions. Fund administration encompasses transfer agency and adds financial, regulatory, and accounting support. 

A custodian is a financial institution that safeguards a fund’s assets, such as cash and securities. 

• Fund Administrators handle financial records, performance reporting, and investor services.  

• Custodians are responsible for: 

• Holding and safeguarding fund assets 

• Settling trades 

• Corporate actions processing 

• Providing asset reporting 

Key Difference: 

Custodians hold the assets; administrators report on them. Custody is about safekeeping, while fund administration is about operating the fund. 

These two roles are often confused, but they serve fundamentally different functions. 

• Fund Management (or investment management) involves: 

• Portfolio strategy 

• Security selection 

• Risk management 

• Generating returns for investors 

• Fund Administration supports fund management by: 

• Handling operations, compliance, and financial reporting 

• Providing accurate data and NAVs 

• Ensuring regulatory filings are submitted 

Key Difference: 

Fund managers make investment decisions. Fund administrators make sure those decisions are executed, recorded, and reported properly. 

• A Fund Accountant is a specialist focused on NAV calculation, ledger maintenance, and reconciliation of fund transactions.  

• A Fund Administrator oversees fund accountants and manages: 

• Investor communications 

• Regulatory compliance 

• Financial statement preparation 

• Audit coordination 

Key Difference: 

A fund accountant is one role within a fund administrator’s team. The administrator delivers a complete service package that includes fund accounting but extends far beyond it. 

• An Investment Manager (also known as a fund manager or general partner) is responsible for: 

• Allocating capital  

• Making buy/sell decisions  

• Managing risk and achieving investment objectives 

• A Fund Administrator supports the investment manager by: 

• Handling investor onboarding 

• Calculating fund performance 

• Managing back-office operations 

• Ensuring financial integrity and compliance 

Key Difference: 

The investment manager generates returns; the fund administrator ensures everything is documented, compliant, and operationally sound. 

Clear delineation between these roles is essential for: 

• Investor Transparency: Investors need to know who is managing their money and who is providing oversight.  

• Operational Efficiency: Confusing or overlapping roles can lead to reporting errors or compliance failures.  

• Regulatory Compliance: Regulators require independent checks and controls between investment decision-makers and fund operations.