How to switch your wholesale fund trustee in Australia: the process explained

Switching the trustee of a wholesale fund sounds intimidating, and many fund managers stay with the wrong provider longer than they should because they assume the transition will be painful. In reality, a well-planned trustee change is more straightforward than most managers expect. The mechanics are well-trodden, the legal steps are defined, and a capable new trustee will do most of the heavy lifting.

Before you start: pick the right time

Some times are easier than others. Consider switching between reporting periods, before the audit cycle, alongside another structural change, and outside major capital raising or distribution events. None of these are showstoppers — a trustee change can be executed at any point if the timing is otherwise right.

Step 1: Engage the new trustee

Select a new trustee and engage them. This involves initial conversations to confirm fit, due diligence by the new trustee on the fund and manager, a fixed-fee proposal, and formal engagement. This stage typically takes two to four weeks.

Step 2: Review the trust deed

Every trust deed sets out the mechanism for changing the trustee. Most wholesale fund deeds allow resignation and appointment by deed of variation. Some require unit holder approval — your lawyer should review the deed early so you know which pathway applies.

Step 3: Notify investors

Even where investor approval is not required, investors should be properly notified. A good investor communication covers the reason for the change, confirmation that strategy and unit holdings are unaffected, the new trustee’s identity and credentials, the effective date, and any operational changes (new bank account details, investor portal access, contact details).

Step 4: Execute the legal documents

Core documents: deed of variation or deed of appointment; updated trust deed (if other provisions are being modernised); new Investment Management Agreement; new CAR Agreement (if moving to a new licensee); and updated Information Memorandum.

Step 5: Handle the regulatory notifications

Updates required: ASIC notifications, ATO registered contact update, AUSTRAC reporting entity details, new trust bank accounts, and insurance run-off cover for the previous trustee. These need to be carefully sequenced to avoid gaps during the transition window.

Step 6: Transfer the records

The standard handover pack includes the unit registry, historical NAV calculations, books and records, bank statements, subscription and redemption records, annual financial statements and audit reports, tax returns, compliance records, and investor correspondence templates.

Step 7: Transfer the assets

Asset transfer mechanics depend on what the fund holds: cash accounts are opened in the new trustee’s name and balances transferred; listed securities are transferred by CHESS; private equity holdings require share register updates; real property requires conveyancing; private credit positions require loan document and PPSR updates.

Realistic timelines

For a straightforward wholesale fund, full transition from initial engagement to operational handover typically takes six to ten weeks. Funds with complex asset bases or those requiring investor approval can take three to four months.

Working with FundPro

FundPro has onboarded multiple funds from other trustees and has a structured transition process that handles the legal, operational and investor communication aspects in parallel. Our directors James Watson and Jonathan Raymond personally manage transition engagements. Get in touch at info@fundpro.com.au.

This article provides general information only and does not constitute legal, tax or financial advice.