The Primacy Workplace AUM fee can be used to charge a percentage of the value of a client’s assets as part of the Month end process.
For additional information on the month end processing see How to perform a month end process
Open the wizard by clicking on Tools > Add-ins > Month end properties wizard. Alternatively click Ctrl + Q and select Month end properties wizard from the quick launch.The Accrue management fees at set frequency? check box must be selected in the Month end two properties page of the Month end properties wizard. If this is not checked, the fee will not calculate or be charged at month end.
Setting up the AUM Fee
Primacy Workplace has a built in AUM fee. Click Client administration > Lists > Setup > Fees. Alternatively, press CTRL+Q to move the cursor to the quick launch field. Type the fee keyword into the quick launch box. Select the Fees result. To open the properties of the fee, double click the item with the Fee code AUM.
Properties of the AUM fee
Fee code - AUM
Fee – Management fee (change as desired)
Fee type – Ad valorem
Tier type – Banded variable rate or Stepped variable rate
Fee calculations tab
A banded tier type will charge the single rate associated with the tier for any balance or value which falls between the From and To values of that tier, as entered into the Tier maintenance grid of the Fee calculations tab. A stepped rate will calculate and sum the fee, as calculated, in each of the tiers, as entered into the Tier maintenance grid, up to and including the tier in which the balance or value falls. Please contact Primacy Support if the Low and High band limits need adjusting on your database.
For additional information on fee properties refer to Fees (form) and How to add fee calculations.
Ledger accounts tab and accounting entries
General Ledger account postings will take place in accordance with the accounts entered into the Client and Master institution sections of the Fee properties > Ledger accounts tab.
Monthly postings will be made into the expense and payable accounts of the client. In the example above, 7320 - Fee expense and 3330 - Fee payable. These postings are made as part of the Month end process. The postings will not be available in the Unposted transactions list for approval. The postings are automatically approved and are not individually visible in the Recently posted transactions list.
The payable account can be cleared on a quarterly basis by completing the field What is the expense management fees frequency? in the Month end properties wizard. This expense posting will only take place if the check box Expense management fees at set frequency? is checked. These fields can be found in the Month end properties wizard.
Invoicing
The AUM fee values and postings do not form part of the Primacy Workplace invoicing process. The values charged to the client's account ]does not appear on an invoice.
Fee calculation forms affecting the calculation of the AUM fee
The number in the first column represents the order in which the Month end process calculates the fee. If no record exists at security or client level, the process will charge according to the next level
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4 |
Fee Properties > Fee calculations |
This setting can be considered the standard fee. The rate assigned in this form will be used in the final stage of the AUM fee calculation process. If no other fee calculations' forms have been completed this is the rate at which the value of all assets are charged with the exception of excluded assets. (see exclude asset from AUM below) |
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3 |
Client properties > Fees > Fee calculations |
All (remaining) assets (cash and stocks and bonds) for this client will be valued and charged at the rate in this form with the exception of excluded assets. (See also Waive for this Client?) |
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2b
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Client properties > Assets > Cash account > Fee calculations |
The balance of this cash account will be charged at the rate in this form (See also Waive for this account?) |
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2a |
Client properties > Assets > Investment account > Fee calculations |
The asset(s) in this investment account will be charged at the rate in this form (See also Waive for this account?) |
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Security properties > Fee calculations |
Not in use |
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Security types properties > Fee calculations |
Not in use |
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1 |
Security properties > General > Exclude from AUM calculation |
Any client holding this security will have the value excluded from the calculation of the AUM fee (See also Waive for this security?) |
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Example
Fee calculations' forms set as follows
AUM fee properties > Fee calculations= 2.25%
Bank of America Ordinary $1.00 stock > Security properties > Exclude from AUM calculation = Yes
Client properties > Assets > Accounts > Cash account number 001> Fee calculations= 2%
Client properties > Assets > Accounts > Investment account number 101 > Fee calculations= 2.5%
Client Properties > Fees > Fee calculations = 5%
Assets will be valued and charged according to the priority order in the first column of the table above
Question 1. Are there assets with the Exclude from AUM calculation checked in the security properties?
Yes. Bank of America holding. Fee value= 0 (1 above)
Question 2. Are there assets, cash or otherwise held in any cash or investment accounts. Is there a fee calculation associated with these accounts?
Yes. Charge according to the Fee calculations' tabs on accounts= numbers 001 and 101
All assets in Investment account number 101@ 2.5% (2a above)
Balance of the cash account number 001 @ 2% (2b above)
Question 3. Are there other cash or investment accounts with no Fee calculations?
Yes. Is there a Fee calculation associated with the client in Fee Properties > Fees > Fee calculations?
All other assets in any other Investment and cash accounts @ 5% (3 above)
If there is no value in Client Properties > Fees > Fee calculations then all other assets would have been charged @ 2.25% (4 above, the standard rate as set in AUM fee properties > Fee calculations)
Waive for this client?
How to waive the AUM fee from being charged to a client
Open the client. Client properties > Fees > Fee calculations > Add fee calculation. Select the AUM management fee in the Fee field and check the box Waive fee for this client? Click Save or Save and close
Waive for this cash account?
How to waive the balance in a cash account from being included in the asset values
Open the properties of a client > Assets > Accounts. Click to open the properties of the cash account and select Fee calculations. Check the box labelled Waive for this account?
Waive for this investment account?
How to waive the value of all assets held in a certain investment account of a client
Open the properties of a client > Assets > Accounts. Click to open the properties of the investment account and select Fee calculations. Check the box labelled Waive for this account?
Waive for this security?
How to waive the value of a security from the AUM fee for all clients holding the security
Open the properties of the security. Security properties > General. Check the box labelled Exclude from AUM calculation
How to create a variance to the standard AUM fee
The standard AUM fee rate refers to the rate assigned in the Fee properties > Fee calculations form of the AUM fee code
Open the client. Client properties > Fees > Fee calculations > Add fee calculation. Select the AUM management fee in the Fee field. Complete the Tier maintenance grid. These tiers will apply to this client only and the assets valued will be charged according to these % rates
For technical use
Stored procedures
GetAUMInvestments
DoManagementFees
Functions
fnCalculateForwardGainLoss in stored procedure GetAUMInvestments
fnCalculateFee in stored procedure DoManagementFees
Tables
AUM1
AUM2 (Do not use - Used for AUC calculation and not related to AUM)
AUM3
AUMSummary
System properties
Management fee includes bond interest
AUM accrues 1/12 rather than actual days
AUM Time Deposit default fee rate
Minimum AUM fee to post
Charge AUM on cash and fixed deposits
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