When the administration fee rate is a sliding scale, the highest Administration fee rate will be shown on Investor Statements regardless of the market value on the account.

The Reason why the highest fee rate is displayed is because the percentage displayed would not always be the percentage taken and this could prove confusing to clients, especially if more fees were taken than the percentage displayed.

This happens because of:

a. Market value fluctuations during the statement period – The investment value could have dipped between scales for the statement period and fees are calculated on daily market values. For instance, if the market value only exceeds the scale on the last day of the statement period and the fee percentage for the new lower stepped scale is shown, it can cause complaints from the client, as fees would have been taken on the higher percentage during the month.

b. On progressive scales various percentages can apply.

Last Updated on 8 years ago by Antoinette Van Meyeren