Independent agent: what does his job consist of, what is his scope, why calling on him?
The independent agent acts as third party for stakeholders (shareholders, borrowers, sellers, buyers, investors, lenders, creditors, etc) during a financial transaction. His perfect knowledge of the mechanisms of financial operations makes him the operational expert on whom companies and their advisors rely on for execution and monitoring purposes. The growth in the number of financial transactions and operations in recent years, as well as the evolution of regulations regarding transactions, reinforce the need to use an independent third party approved by the regulator.
Using an independent agent offers multiple advantages, it allows to:
- gain efficiency in the management of assets and resources by relying on a professional, agency services provider.
- reduce operating costs, increase the productivity of front to middle-office teams, and redeploy valuable resources to higher value-added services.
- in case of white labelling agreement,
- keep its commercial reach with relevant clients by retaining the role of “agent of record” for each transaction.
- continue to benefit from recurrent agency fees by retaining a percentage of the agency revenues generated by each of the outsourced transactions.
Outsourcing the agency services allows to externalize sensitive and risky middle and back-office tasks:
- manage the day-to-day administration, reporting, and management of the loans/bonds/other asset classes,
- as well as the distribution of sensitive documentation
- and the tracking of investor activity, when/if required
- calculate interest, early repayments and manage interest payments
And minimize your operationnal and IT implementation risks by:
- relying on professionnals with a successful track record in assisting stakeholders in the closing, management and administration of debt and equity financings across different asset classes and jurisdictions.
- relying on their administration system by providing services as an external party
Conclusion
In an increasingly demanding environment (complexity of financial operations, lenghtening of the processes, regulatory constraints, etc.), outsourcing its agency activity allows companies and investors to better distribute their internal resources and stay focus on the business. By adopting this strategy, the companies achieve an economy of scale by improving their operational efficiency while relying on the expertise of a third party.