Commission distribution using Management Fee

  • Added the ability to calculate and distribute a commission to linked advisors from an external daily management fee.
  • A proportional % commission from the imported management fee will be distributed to advisors whose contracts are tied to investments in this specific instrument.
    • (investor market value x commission % x daily management fee)/total market value in instrument: This sum is repeated for each day, using the management fee per day and summed together for the commission run duration.
    • % commission is a variable that is set on the Instrument -> Fees -> Implicit commission %.
  • Advisors earn the commission in their Fee Portfolios. Once distributed, use Brokerages to Pay out Report to create withdrawals on the various fee portfolios for the commission earned to be paid out.
  • While the commission calculation is instrument-specific, the importing of the management fee is applicable for all instruments.
Step 1: Instrument Configuration

Navigate to the instrument where commission will be earned.

  • Instrument card -> Fees button -> Implicit commission % can be set
    • This will determine the commission % used, as per the calculation explained above
  • Instrument card -> Fees button -> Implicit commission cash instrument
    • This will determine in which instrument the commission is earned in in the relevant Fee Portfolio
Step 2: Importing Management Fees

This step involves importing the daily management fees into the system.

  • Navigate: Go to Instruments > Import Management Fees.
    • The file must have the following columns: Unit Trust Code, Unit Trust Name, Date, Fee Type Code, Fee Type Name, Day Expenses
    • Unit Trust Code is the Instrument Code
    • Unit Trust Name is the Instrument Name
    • Day Expenses is the Management fee per day
  • Choose File: On the import screen, click on the “Choose File” button.
  • Select File: Select the file containing the management fee data that you wish to import.
  • Import: Click the “Import” button.
  • Confirmation & Errors: The system will display a confirmation section on the screen. If there are any errors (e.g. incorrect instrument details, invalid date format), a list of applicable errors will be displayed.
  • Confirm/Cancel: If you are satisfied with the import and there are no critical errors, click “Confirm.” Otherwise, you can “Cancel” the import.
Step 3: Managing Management Fees by Date

After importing, you can review the imported management fees for specific instruments.

  • Navigate: Go to the specific instrument.
  • More Actions: From the instrument’s main menu, click on “More Actions”.
  • Select Option: Choose the “Manage Management Fees by Date” option.
  • Date Range: Select the desired date range to view the imported fees.
  • View List: The system will display a list of management fees for the selected period as well as an indication (Yes/No) if the commission has already been distributed for each entry.
Step 4: Performing Commission Run

This step initiates the calculation and distribution of commissions to advisors.

  • Navigate: Go to the specific instrument.
  • More Actions: From the instrument’s main card, click on “More Actions”.
  • Select Option: Choose the “Commission Runs” option.
  • Date Range & Completion Status: You will see a list of past commission runs, along with their date ranges and an indication of whether they have been completed.
  • Add New Commission Run: To add a new commission run, click on the blue “Add” button.
  • Select Date Range: Enter the date range for which you want to process the commission.
  • Distribute to Advisors: Click on “Distribute commission to advisors”.
  • Processing: The system will then process the commission, allocating it to the specific advisors proportionately to the contract value on their respective contracts.
Step 5: Checking Commission Payouts

Finally, you can verify the commission amounts distributed to individual advisors.

  • Navigate: Go to the specific advisor’s profile.
  • Fees: From the advisor’s profile, navigate to the “Fees” section.
  • Fee Report: Select the “Fee Report” option.
  • Fee Type: In the fee report, choose “Commission Fee” as the fee type.
  • View Details: The report will display the commission taken for that specific contract and advisor, allowing you to review the payout details.
Step 6: Paying Commissions
  • On Reports -> Brokerages to Pay Out you will see all advisors where there is commission earned but not paid out yet -> select advisors you’d like to pay -> click on Create Withdrawals at the bottom of the page
  • Created withdrawals will be in Submitted state. Navigate to Instructions -> Submitted -> filter by your cash instrument as specified in step 1 where commission earned cash is written to -> more actions -> Authorise. This will enable you to authorise all these instructions in bulk
  • Banking -> Payment Batches -> Create Payment File -> filter the relevant payments -> Create
  • You can then download the generated payment file and import into your banking system.
  • Once payments have been made, and they reflect on your bank account -> import your bank statement and these entries will automatically match against the payment file since the system expected references will be used for the payments
  • Once payments are matched, the created withdrawal instructions will be Completed.

Last Updated on 3 weeks ago by Adrienne Dill