Fee Control Account

The concept of a fee control account improves the liability towards recipients (adviser, administrator etc.) when taking fees. This liability is the value of fees calculated on the client account. With fee runs, fees are often taken as units in non-cash instruments, which does not accurately translate into the calculated fees.

The fee control account will receive all fees taken (fee taken transaction) from client accounts and the fees will be distributed from the fee control account to the recipient’s account as cash (fee earned transaction). The fee control account will then be managed to switch the necessary units into cash and transfer money to the accounts where fees will be paid out from.  The fee control account will contain the profit or loss which is a financial aspect that can be reported on independently.

Fee control accounts will be setup on the Financial Service Provider similar to Working -, Reserve – and Fee portfolios.

The fee earned transactions will be allocated to the transacting account of the recipient’s fee portfolio in the currency in which the fees has been taken.

After a fee run the system will automatically create a switch instruction on the Fee control account to convert units to cash.

Links on the ‘fee taken transactions’ can be followed to the ‘fee earned transactions’ and the other way around.

The fee control account principal will apply to all fees, except bank charges on money transfers and Transaction fees.

Last Updated on 3 years ago by Antoinette Van Meyeren