Do You Have the Right Transfer Agent?

7 Questions to Ask Before Choosing a Provider

A transfer agent plays a crucial role in maximizing shareholder value by delivering efficient, effective and seamless shareholder services. In fact, your transfer agent, also known as a stock transfer agent, is the face of your company to your shareholders. The value of selecting the right provider — one that can grow and evolve with your company — cannot be overstated.

In your search for the right transfer agent, you’ll want to understand what their capabilities are and know the right questions to ask prospective firms. These seven questions can help you choose a transfer agent with the experience and expertise required to respond quickly to your needs, deliver shareholder value and best support your business.

01. How does your call center provide quality shareholder experience?

Whether for stock account inquiries or requests for forms to perform a transaction, your shareholders depend on your transfer agent’s call center representatives for information, assistance and timely issue resolution. To be prepared for the broad range of shareholder needs, and resolve issues quickly and completely, these representatives need specialized training, robust technology and commitment to excellent customer service.

Questions to ask:

Are your call center representatives hired, trained and retained as in-house talent?
What volume of calls does your call center manage annually?
What is your first-call resolution rate?
Does your call center technology ensure all representatives have access to any prior calls or correspondence with your shareholders?

What are the key benefits to look for in a transfer agent?

Industry experience
Responsiveness to issues
Consultative approach
Accuracy and reliability
Flexible problem-solving
Client and shareholder satisfaction ratings

2. What resources do you offer to prioritize shareholder and issuer satisfaction?

You’ll want to meet regularly with a dedicated relationship manager who understands your business objectives and can recommend the right solutions for achieving your goals. It is also important that transfer agent experts stay up to date on current industry trends and best practices, so that their services meet or exceed regulatory expectations. Finally, they must provide a user-friendly website for shareholders.

Questions to ask:

Will our organization have a dedicated relationship manager who will work collaboratively to meet our specific needs?
Do you provide robust reporting that measures key performance indicators (KPls) like shareholder satisfaction percentages, call answer rate, volume of calls, turnaround time, etc.?
What technology resources and support are available for issuers and shareholders?

Transfer agent must-haves
An experienced transfer agent should have a reputation for accuracy and reliability, and have disciplined processes in place to protect your company from potential risks.

03. What kind of operational performance reporting can you share?

Ask prospective providers whether they incorporate operational performance measures. Reviewing KPls or service level agreements (SLAs) can help you determine how well they perform their core business functions and how effectively shareholder inquiries and requests are handled.

Questions to ask:

Do operations leaders participate in regular meetings with other departments like technology and risk management?
Do call centers have key quality cornerstones in place that include being caring, courteous, responsive and efficient?
Are there dedicated operational resources aligned with company processes that can seamlessly and accurately execute complex transactions?

Why experience matters
A transfer agent who has extensive experience with corporate actions is in the best position to facilitate the corporate actions process and ensure a smooth transaction for you and your shareholders.

04. What kind of data validation and support is involved in your onboarding process?

If you are switching transfer agents, migrating to a new system can be challenging. An experienced transfer agent will have an onboarding process that includes a thorough data validation process. It can also improve upon your current solution by finding efficiencies and reducing risk by limiting manual data entry. Most importantly, you’ll want to be sure your transfer agent has the experience and resources needed to support your team throughout the onboarding process.

Questions to ask:

Prior to onboarding, does your team provide an in-depth analysis of the requirements needed for a seamless transfer of data from my current transfer agent?
What level of data mapping and cleansing is included in the onboarding process?
What technology do you employ for streamlining processes and automating tasks?

EQ shareholder services
EQ currently manages records for 40 million shareholders and consistently ranks highest in client satisfaction surveys.

05. Do you have cost-saving recommendations for clients

An experienced transfer agent can help you meet specific business objectives, including streamlining costs without sacrificing quality. Some activities, including reducing traditional mailings by moving shareholders to online communications and automated clearing house (ACH) payments, can actually improve the shareholder experience while reducing expenses.

Cost savings opportunity
Determine your dividend mailing options with these three steps:
Step 1: Consider whether to discontinue ACH advice mailings.
Step 2: Promote ACH mailing to shareholders who currently receive a check.
Step 3: Review the frequency of the statements for your Dividend Reinvestment Plan.

Questions to ask:

How regularly do you meet with clients to determine which actions could deliver smart cost savings without compromising business objectives or shareholder service?
Do your best practices include initiatives that can reduce the cost of mailings?
How do you promote shareholder digital service solutions, such as an electronic delivery option for statements, tax forms and client communications?

06. What compliance and data security safeguards do you have in place?

On behalf of the companies they serve, transfer agents handle a multitude of reporting functions as required by the Internal Revenue Service (IRS), the Securities and Exchange Commission (SEC) and state regulations to keep companies compliant. At the same time, data security has never been more essential. Your transfer agent will need to monitor and help maintain compliance with any applicable legislative changes, comply with regulations designed to prevent fraud and protect sensitive information with robust security protocols.

Questions to ask:

What practices do you have in place to maintain compliance with SEC regulations?
How do you communicate the impact of legislative changes in the U.S. and abroad to clients and shareholders?
What are your data security protocols?
In case of a breach, how and in what detail do you assist in communicating with clients?

Industry-leading security measures
EQ is the first in our industry to introduce facial recognition-powered identity verification to our shareholder portals to bring increased security to the shareholders we serve.

07. What other services do you offer to your transfer agent clients?

Inquire whether the transfer agent service provider also has expertise in employee equity plans and other corporate and shareholder solutions. You may benefit from a firm with a broad base of experience as well as cost savings.

Questions to ask:

Do you also provide services to help manage employee equity plans?
Do you offer guidance on the materials needed for shareholder proposals?
Can you help with Depository Trust Company (DTC) eligibility or complete DWAC/DRS transactions for important investors?
Do you the have real-time ownership data needed for a proactive shareholder engagement strategy?

According to the Securities Transfer Association, transfer agents in the U.S. and Canada keep records for more than 15,000 issuers of securities, representing the investments of over 100 million registered shareholders.

The right fit

It’s important to choose a transfer agent that can grow with your company and provide expert guidance as your business evolves. It should have a reputation for accuracy and reliability and have disciplined processes in place to protect your company from risk. Most importantly, your transfer agent should respond quickly to your needs and treat your shareholders the way you would treat them.

At EQ, our transfer agent services team brings industry expertise to every interaction. With an average 15+ years’ industry experience, our dedicated relationship managers deliver expert guidance with a collaborative, consultative and high-touch approach. Our reputation for outstanding service and high satisfaction ratings is reflected in independent surveys, such as the Group Five annual benchmark survey, which recently rated EQ #1 in Transfer Agent Client Satisfaction.

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