A shareholder services agent is typically a third-party entity that partners with a publicly traded corporation or mutual fund to provide for the ongoing needs of the shareholders. Shareholder services agents are responsible for investor record-keeping, communications, and some other administrative responsibilities. They also attend to shareholders' problems or concerns.
Breaking Down Shareholder Services Agent
Shareholder services agents are one of many entities that a mutual fund works with to manage the operational activities of a fund. Shareholder services agents also serve large corporations in various capacities.
Once a private company grows to a sufficient size and decides to go public, it must adhere to government regulations regarding information disclosure and shareholder rights. Many public companies seek the expertise of a shareholder services agent to ensure their shareholders' needs are looked after efficiently. Even if shareholder services are conducted in-house via an agent, they represent one of the extra costs associated with a publicly-traded company as opposed to a private one.
Shareholder services agents will typically work in conjunction with a company’s investor relations department. Investor relations is typically the business unit that partners closely with the company’s shareholder services agent and leads communication between the company and its investors.
Computershare is one of the most well-known shareholder services agents, globally. The company can handle a wide range of activities including employee equity plans, mortgage servicing, proxy solicitation, stakeholder communications, support for initial public offerings, and many other services involving finance and governance.
In all types of managed funds and specifically mutual funds, the investment company will partner with many different third parties for the fund’s operational services. Third-party service providers may include custodians, accountants, administrators, and shareholder services agents. In some cases, the responsibilities of a shareholder services agent may overlap with responsibilities handled by other operational service providers and specifically mutual fund administrators.
Shareholder services agents may also sometimes be referred to as transfer agents. With managed funds, these entities can offer a wide range of services for both mutual fund operations and investor communications. Service responsibilities of the shareholder services agent can include delivery of communications such as corporate actions or payments, access to professional records, and mailing or e-delivery of professional fund reports. Shareholder services agents may also be responsible for providing communication to financial advisor intermediaries and supporting compliance and compliance reporting. Leading shareholder service agents for mutual funds include Boston Financial Data Services, Bank of New York Mellon, U.S. Bancorp Fund Services, and UMB Fund Services.