Year-End is Coming: What to Actually Check Before It Arrives

Written By Morning Star

Custodia Advisory | Private Equity | Year-End Wind-Ups & RFP's

Financial year-end brings a predictable rhythm for most platforms — final reporting, investor updates, closing out the year's numbers. It also brings something far less predictable, and far less scrutinised: a wave of charge-out rate increases from law firms and fiduciary providers alike, timed to land quietly alongside everything else competing for attention at year-end. If there's one season of the year worth building a genuine review process around, this is it.

Why year-end is when rate increases actually land

Most outside counsel and fiduciary rate increases are structured to take effect at financial year-end or the calendar new year — a scheduling choice that isn't accidental. It's the exact moment a platform's internal attention is most divided: closing books, finalising investor reporting, managing year-end distributions. A new rate card or a quietly revised fee schedule arriving in the same window as all of that is far less likely to get the scrutiny it would receive at any other point in the year. Providers know this. It's precisely why so many increases are timed to it.

What to actually look out for

Charge-out rate increases. Compare the new rate card against the OCG's actual cap or escalation provision, not against last year's rate. An increase that looks modest in isolation — a few percentage points — can still breach a specific contractual limit if nobody checks the agreement itself rather than relying on memory of "what we usually see."

Fiduciary fee hikes specifically. These deserve independent attention, separate from the legal rate review. Director fees, share trustee charges, AML/KYC administration costs — all frequently reset at year-end under their own schedule, often without the same visibility the legal rate card gets. Check every fiduciary invoice against the governing management agreement, not against the prior year's bill.

Out-of-pocket expenses deserve particular attention at this time of year. We've seen out-of-pocket charges on fiduciary invoices move from roughly $500 to over $1,000 within a single renewal cycle — a jump that, on its own, should immediately prompt the question of whether it aligns with what the management agreement actually permits. These charges are especially easy to miss precisely because they sit in a category that reads as incidental rather than substantive, and because they're frequently blended into a broader invoice total rather than itemised in a way that invites comparison year over year. Before accepting any out-of-pocket line at face value this year-end, check it against the specific terms of the governing agreement — not against whether the total invoice looks broadly reasonable.

Disbursement and out-of-pocket categories. Year-end is also when broad, loosely defined expense categories tend to expand quietly. A category that was reasonably scoped last year can widen without anyone explicitly renegotiating it — worth confirming the itemisation still matches what the OCG actually requires.

Whether the increase was actually agreed, or simply announced. A rate card sent as a notice is not the same as a rate increase that's been reviewed and accepted. Confirm there's a documented sign-off before the new rate is applied to a single invoice.

RFP reviews: don't let year-end pressure shortcut them

Year-end is also, for many platforms, the natural point to run or refresh an RFP process for outside counsel and fiduciary providers. The risk is that the same time pressure driving everything else at year-end pushes the RFP into a rushed, check-the-box exercise — extending an existing relationship because there's no time to properly compare alternatives, rather than because the incumbent actually won a genuine comparison. If an RFP is due, build in the time for it deliberately, separate from the year-end reporting crunch, rather than letting it compete for the same compressed attention.

Liquidate dormant entities before they roll into another year

Year-end is also the natural checkpoint to review every entity on the platform and ask, plainly, whether it still needs to exist. A dormant SPV, a wound-down co-investment vehicle, a structure that served its purpose two funds ago — none of them stop generating registered office, AML, and director fees just because they're no longer active. Every year-end that passes without a deliberate dormant entity review is another full year of fees on a structure doing nothing. Confirm there's no remaining liability or regulatory reason to keep each dormant entity open, and formally liquidate the ones that don't need to carry into next year.

A short checklist for this year-end

  • Pull every incoming rate card and fee schedule against the actual OCG or management agreement — not against last year's invoice
  • Review fiduciary fee increases separately from legal rate increases, since they're frequently reset on a different, less visible cycle
  • Check out-of-pocket expense line items specifically — a jump from $500 to $1,000+ in a single cycle should be checked against the management agreement immediately, not waved through as incidental
  • Confirm disbursement and out-of-pocket categories haven't quietly widened
  • Build dedicated time for any RFP review due this cycle, rather than letting it get compressed by reporting deadlines
  • Identify and formally liquidate dormant entities before their fees roll into another year

None of this requires new infrastructure. It requires treating year-end as the specific, predictable window it is — the point in the calendar when scrutiny is lowest and increases are most likely to land unchallenged — and building the review to match.

Related reading

Custodia Advisory helps platforms run a genuine year-end review — rate increases, RFP cycles, and dormant entity liquidation included. Enquire about a complimentary review ahead of your year-end.

Morning Star
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