BENCHMARK SURVEY: Fund Tax Cost Survey
This new, standalone survey (formerly part of the Audit Survey) asks the question: “Are tax provision creation, tax return preparation, tax return review, and/or tax return signing fees associated with the annual audit and tax return processes for the fund company within a reasonable range of what other fund companies are paying when considering the complexity of the funds’ portfolios?”
Originally part of the Barrington Fund Audit survey in 2015, we have since found that there are different audiences for Fund Audit and Tax surveys, and that Audit and Tax cycles generally do not match. Importantly, we also found that Tax processes (unlike standardized Audit processes) can follow radically different models with multiple process groupings using different arrays of multiple service providers.
Fund companies and boards can obtain an accurate comparison of tax costs paid versus predicted costs …
The survey goal is to compare costs for similar complexity levels across different service delivery models. It normalizes the complexity levels and compares funds of equivalent complexity against the universe of funds responding in order to establish relative costs.
… and compare the reasonableness of their firm’s fund tax costs with those of their peers.
Firms can assess the appropriateness of both their overall and individual costs for their unique tax processes.
Independent trustees can better understand the underlying cost drivers for fund tax costs..
Fund boards and fund management can use the data from this survey to confirm or adjust the level of tax process fees they negotiate.