Advance Fee Billing Adjustments
Advisors using Advance billing have the option to calculate retroactive adjustments to the fees already charged for the previous period. These adjustments can be triggered by inflows/outflows that exceed a threshold specified in the billing configuration, as well as by the opening and/or closing of accounts. The adjustment process is run on the day after the end of the period.
For each account that meets a trigger criteria, the following process is used:
- The period is recalculated using the actual data from the period. This includes prorating accounts that were opened or closed during the period and using the actual market value data that reflects the effects of any inflows/outflows or market movement. As with the normal fee collection calculation, adjustment calculations can be based on the Period End Balance (ending market value), or on the Average Daily Balance.
- The new fees generated are compared to the fees originally produced using the projected values at the beginning of the period. An adjustment is created for the difference between the projected fee and the adjusted fee.
- The adjustment is added to the fee collection details and amounts of the next period.
To activate this feature and set your adjustment events, see Billing Settings for full details.
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