2004 Fund Accounting & Administration Survey Results

                 Overall Ranking

1 HSBC GIS (-) 5.90
2 Mellon EFS (1) 5.46
3 BNP Paribas 5.16
4 = Bank of New York 5.13
4 = State Street 5.13

The second year for the R & M fund accounting and administration survey brings a new entrant to the survey results – HSBC – and they have come storming in at first place, followed closely by Mellon European Fund Services.

The survey concentrates on the UK investment management market and seeks the views of those who use outside providers for various aspects of looking after their funds. It does not include transfer agency.

Disappointingly there were some other service providers (e.g. J P Morgan, Citibank, IFM, Bisys) that did not receive enough responses to qualify (minimum 6) but hopefully as the industry expands and more mandates are awarded this will get rectified in future years.

Typical respondents include Aberdeen Asset Management, Gartmore, Goldman Sachs, Henderson Global Investors, Jupiter, L & G, Lazards, M & G, Martin Currie, New Star, Schroders, Standard Life and Scottish Widows. There were also a number of pension funds who responded on the basis that they too have outsourced aspects of their fund accounting and administration and HSBC appears to have a specialty in this area, although others also have some clients. Responses from this client group include Aerion, Railpen, Reed Elsevier and Rio Tinto.

The survey examined 33 different areas consolidated into 6 categories – Core Fund Accounting and Administration, Accounting and Valuation, Communication, Approach and Flexibility, Quality of Personnel and Value for Money. The table for each of these sections are as follows:-

 Core Fund Accounting and Administration 
1 HSBC GIS 5.86
2 Mellon EFS 5.55
3 BNP Paribas 5.14
4 Bank of New York 5.08
5 State Street 4.95

Includes transaction processing, error resolution, query handling, multi jurisdictional capability etc.

 Accounting and Valuation 
1 HSBC GFS 5.96
2 Mellon EFS 5.54
3 Bank of New York 5.20
4 BNP Paribas 5.19
5 State Street 5.10

Covers pricing, tax reporting, regulatory reporting, reconciliations etc.

1 HSBC GFS 5.71
2 Mellon EFS 5.50
3 State Street 5.11
4 Bank of New York 4.96
5 BNP Paribas 4.68

Ability to handle different products, transitions etc.; knowledge of regulatory environment, ability to customize services and quality of relationships with 3rd party providers.

 Quality of Personnel 
1 HSBC GFS 5.74
2 Mellon EFS 5.29
3 Bank of New York 5.00
4 BNP Paribas 4.93
5 State Street 4.83

Competitiveness of fees and overall quality of service.

Client Comments


“Since BNP's acquisition of Cogent we have seen a significant improvement in service levels and a renewed relationship which is proving to be extremely positive for us.”


“They have shown tremendous commitment to extending their hedge fund capabilities in 2003 & 2004.”


“This does not reflect the full impact of Bank of Bermuda acquisition which will improve multi jurisdictional capability. They are genuinely adding real value to our operational capability by facilitating product development (eg OEIC conversion) and acquisitions (eg fund mergers). We could not have moved at the same pace with in-house fund accounting or a weaker provider.”
“HSBC GFS are by far the most competent and professional administrator in the market at the present time.”


“We transferred our fund accounting from BNP Cogent to IFM at the end of 2003, and as always have experienced a few teething troubles, which are reflected in the above scores. Overall we are happy with our choice, but will need to see performance over a longer period before we can comment fully.”

Mellon EFS

“Service has been sustained at a good level for 3-4 years.”
“Mellon has consistently surprised to the upside their willingness and success in finding solutions to the day to day issues we face.”

State Street

“Organisational structure and system platform changes 2-3 years ago has resulted in good, sustained, service delivery over the last 2 years. The business is currently challenged by the migration from InvestOne onto State Street 's proprietary MCH fund accounting system but service levels are being maintained.”
“We've been through the Deutsche GSS to State Street transition process over the last 12 months, which has been pretty painful for all concerned.  I'd expect to see higher ratings next year, but for this year we've definitely been unhappy with State Street 's performance.  The migration process was very poorly handled in our view.”
“The service we have received as improved significantly combined with a large increase of business with them.”


The survey was conducted in May 2004. Approximately 200 investment managers were contacted throughout the UK and asked for their opinions. 64 responses were received. The scores for each provider are calculated as a simple average of all the scores received, no weighting is applied. Scores were given on a scale of 1 (low) to 7 (high).

Web Analytics