Gemini partners with independent advisors to provide comprehensive solutions for their open-end mutual funds and closed-end interval funds. We service these products through the advisor’s own standalone trusts or through one of our shared (series) trusts. All mutual funds are registered with the U.S. Securities and Exchange Commission (SEC) in a trust format.
Why Start a Mutual Fund?
As an advisor, starting a mutual fund offers you many advantages, including:
New distribution opportunities to market to the retail public, other advisors, and broker-dealers
A potential dramatic increase in operational efficiencies
Reduced transaction costs
In addition, mutual funds are an appealing option for investors, as they offer:
Transparency and oversight. Mutual funds have clearly-defined investment objectives and strategies, with set investment parameters. The mutual fund administrator and the US Securities and Exchange Commission (SEC) closely monitors each registered mutual fund to ensure its compliance with its stated investment strategy. Investments and fees are reported quarterly, semi-annually, and annually to shareholders and regulators, which provides a public record.
Diversification. Mutual fund investors gain diversification and asset allocation – which may reduce overall portfolio risk – without the large amount of cash needed to create an individual portfolio.
Economies of scale. Mutual funds’ buying and selling power may result in a reduction in transaction costs for investors.
Liquidity. Mutual funds transact on a daily basis after the close of the stock market, making them a liquid asset.
Professional management. Mutual funds offer investors access to professional investment management.
Tax and purchasing simplicity. Investors can purchase a mutual fund from a financial advisor or through online brokerage platforms, and a 1099 tax filing provides ease and consistency for investors.
Important Information About Launching a Mutual Fund
Mutual Fund Trusts
All mutual funds must register with the SEC in a shared (series) trust or in a standalone trust format.
This type of trust is composed of independent funds, all managed by separate investment advisors. This means your fund would be registered in a trust with other funds, but you are still fully in control of managing your fund as an independent advisor. Your fund would share some costs with other funds in the trust, easing the financial burden for costs incurred while running a fund.
Specifically, series trusts offer many advantages that may not be achievable through a standalone trust, including:
- Access to trust level selling agreements, if applicable.
- Increased operational efficiencies, as funds in the trust share directors/trustees, chief compliance officers, and officers as required by the SEC.
- Reduced operating costs, as a group of advisors shares expenses such as those for auditors, fund counsel, insurance, legal, trustees, blue sky, and more.
- The ability to attract qualified board members who possess the expertise to provide proper board compliance and oversight.
- Freedom for the advisor to focus on portfolio and relationship management.
Gemini offers access to multiple series trusts, giving you several options to meet your needs.
Your mutual fund is the only fund in a standalone trust. Your firm is responsible for all costs for your fund; however, Gemini will apply our extensive experience and access our multitude of partnerships to help you form your own board of trustees and align all other services the trust needs.
As your fund matures or your business plan changes, you may find that you need a different approach to your trust services. You may need a more or less specialized or consultative approach than you’re getting through your fund’s current arrangement. Thus, a move to a different type of trust may be prudent. Gemini can help. We specialize in helping you improve the business model for your existing registered fund through conversions from:
- Standalone trust to standalone trust
- Series trust to series trust
- Series trust to standalone trust
- Standalone trust to series trust
Learn more about the differences in timelines and costs between a series and standalone trust.
Gemini’s service offerings are custom-designed to be an extension of your back office. We help you execute your mutual fund model by offering you fully customizable, cost-effective core services while seamlessly integrating with your workflow and processes as though we are a continuation of your team, not a separate entity.
Contact a member of our sales team to talk in more detail about starting a mutual fund or converting an existing fund to Gemini.
*as of 3/31/18