Elevate Annual Costs & Charges Disclosure

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Abigayle Simpson
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Elevate Annual Costs & Charges Disclosure User guide For adviser use only Background Elevate Costs and Charges Disclosure is a new MiFID document providing clients with an annual breakdown of the

1 Elevate Annual Costs & Charges Disclosure User guide For adviser use only Background Elevate Costs and Charges Disclosure is a new MiFID document providing clients with an annual breakdown of the charges they ve paid. The format and the information presented in the document are guided by the regulations and include the following: Charges summary Breakdown of service charges Breakdown of investment charges Cumulative effect of costs and charges We have categorised the charges by Service and Investment to make it easier for clients to understand the charges they ve paid. Service charges: These include charges we make for carrying out transactions and associated activities. They also include any charges paid to advisers and the charges for any discretionary manager services. Investment charges: A daily data feed (Industry European MiFID template or EMT) includes data provided by fund managers and is used to calculate these charges along with information held on the platform. The charges (other than one-off) are implicit, i.e. will have already been charged as part of the fund price. The charges are mapped to the relevant MiFID categories and are shown as and % amounts over the reporting period. The amounts are calculated using the % rates provided on the EMT and the amount is calculated using the average daily value for each investment held over the reporting period (daily totals are summed and divided by the number of days in the reporting period). These are held on the platform and we use the actual amounts paid by the client. These are mapped to the relevant MiFID categories (One off charges, ongoing charges, transactional charges and incidental charges) and are shown as amount totals over the chosen reporting period. The % amounts are calculated using the average value of the product over the reporting period (daily totals are summed and divided by the number of days in the reporting period). Elevate Annual Costs & Charges Disclosure 01/06

Costs and Charges Disclosure document The new stand-alone document will not be combined with any other correspondence from us (such as Regular Statements), and it will be generated: Automatically on

2 Costs and Charges Disclosure document The new stand-alone document will not be combined with any other correspondence from us (such as Regular Statements), and it will be generated: Automatically on an annual basis When an account is closed (as part of our account closure process) Ad-hoc by advisers Separate statements are produced for clients with multiple Elevate accounts (for example clients with both Joint and Single accounts). The document reports all charges paid from the Elevate ISA, Elevate GIA and Elevate PIA where applicable. The Elevate Cash Account is not included. Annual: The first annual Costs and Charges Disclosure will be issued to clients in Q We will provide further updates soon about the date we ll start generating these documents. Clients who have chosen paperless communications will receive an notification when their Costs and Charges Disclosure is available and will be able to login to their Elevate account to view the document online. We will send it in the post to clients without online access and to clients who have not yet chosen to go paperless. Clients with eligible holdings at any point during the reporting period will receive a Costs and Charges Disclosure. The full reporting period is from 03/01/18 to 05/01/19 in the first year. For subsequent years it will cover the period 06/01 to 05/01. Clients invested for part of the year will receive Costs and Charges Disclosure for the time invested and we ll also issue one as part of our account closure process. Adviser Ad-hoc: As well as the annual Costs and Charges Disclosure that we provide to clients, advisers will be able to generate an ad-hoc statement which shares the same information and appearance. The ad-hoc disclosure document is requested via Reports & Documents > Request Costs And Charges Disclosure where the reporting period start and end date can be set for a maximum 12 month period (a reporting period that covers any time before 03/01/2018 cannot be selected). Both the annual and ad-hoc Cost and Charges Disclosure are generated in a PDF format and stored in the client s Reports & Documents library, where the ad-hoc disclosure document is identified separately. 02/06 Elevate Annual Costs & Charges Disclosure

Charges categories Service charges and Investment charges are broken down further into different categories, including: One-off charges Ongoing charges Transactional charges Incidental charges How

3 Charges categories Service charges and Investment charges are broken down further into different categories, including: One-off charges Ongoing charges Transactional charges Incidental charges How the charges are taken? Service charges Any initial adviser or discretionary manager charges incurred when adding new money to a product wrapper. This includes the Elevate Portfolio Charge and any ongoing adviser or discretionary manager charges. Any service costs incurred when buying or selling investments. This includes Elevate charges for trading in securities and any adviser charges agreed when switching investments. Any costs incurred for additional administrative services. Service charges are deducted from money being invested or taken from the cash within an Elevate account. Investment charges Any charges that have been deducted by the fund manager when buying or selling an investment. These can include dilution levy or an investment manager s initial charge. This includes the costs taken by the fund managers for the on-going administration of investments. Trading costs incurred by fund managers when buying or selling underlying investments within the fund. Other costs deducted by the fund manager. For example, the impact of any performance fees. Investment charges deducted directly from the fund and are reflected in the fund price and the investment performance. Sections within the Costs and Charges Disclosure document Charges summary The Charges summary shows the total combined charges paid over the reporting period, split into Service charges and Investment charges in and % terms. Key points: The combined charges are shown as a amount and a % of the average value over the reporting period For Service charges this is the actual amount deducted over that period which is converted into a % of the average value over that period Investment charges are based on information provided by the fund manager and the % is converted to a amount based on the average holding over the reporting period The cumulative effect of these charges on the investment return is shown at the end of the Costs and Charges Disclosure Elevate Annual Costs & Charges Disclosure 03/06

Breakdown of charges This section provides extra detail on the charges paid from each product wrapper: The first table shows all of the Service charges paid to us and, if applicable, the client s

4 Breakdown of charges This section provides extra detail on the charges paid from each product wrapper: The first table shows all of the Service charges paid to us and, if applicable, the client s adviser and discretionary manager The second table breaks down all of the Investment charges applied by fund managers Both are split further into One-off charges, Ongoing charges, Transactional charges and Incidental charges. Key points: Investment charges are based on Ex-Post (post sale) investment data provided by fund managers via the Industry European MiFID template (EMT) data feed. If ex-post is not available we will use ex-ante (pre-sale) data to calculate the charges Where no EMT data is available, the amount shown will be based on the OCf If we have not received this information from the fund manager some of the charges may be shown as zero or some of the charges may not be fully accurate. We are working with fund managers to obtain more accurate information If clients have bought or sold securities during the reporting period, the Securities Trading Charge will be included in the Service charges section (as well as any Stamp Duty Reserve Tax or PTM Levy paid as part of the transaction) 04/06 Elevate Annual Costs & Charges Disclosure

Cumulative effect of costs and charges on return This section illustrates the effect that the total charges (shown in the Charges summary ) have had on the investment return over the reporting period.

5 Cumulative effect of costs and charges on return This section illustrates the effect that the total charges (shown in the Charges summary ) have had on the investment return over the reporting period. Key points: The table provides comparisons between: The total value if no charges had been taken and the actual value after charges have been taken as a amount over the reporting period The return if no charges had been taken and the actual return after charges have been taken over the reporting period The Cumulative effect of cost and charges shows the difference between the total combined value of the product wrappers before and after charges and return % before and after charges The difference displayed in Cumulative effect of cost and charges might be different to the total charges shown in the Charges summary. This is because it illustrates the positive or negative investment performance on the additional value that would have been in the Elevate account if it had not been deducted to pay charges Elevate Annual Costs & Charges Disclosure 05/06

6 Other things to be aware of: Potential differences between pre-sale and post-sale disclosure To ensure we accurately convey the charges paid, service and investment charges are based on the average product/holding value over the reporting period when converted to % or amounts respectively. Pre-sale disclosure of ongoing charges shown in the Charges Information document (CID) and displayed on platform screens however, is based on fixed values and the amounts set on application. Viewed side by side, some scenarios may cause clients to query a difference in the % displayed on their CID and the % shown on their Costs and Charges Disclosure. This is often due to large contributions/withdrawals made shortly before the start/end of the reporting period or accounts being opened mid-way through the year. For example: 1. Account opening date: If an Elevate account or product wrapper is opened midway through the reporting period, the % charges will reflect the reduced time invested and the lower number of charge deductions during that period. This means the % shown in the Costs and Charges Disclosure will be lower than the equivalent annualised charge set up on the account. 2. Large withdrawals shortly before the start or end of the reporting period: If a large withdrawal is made from an account shortly before the start of the reporting period, this may affect the % ongoing charge shown as the total deducted will include charges accrued in the month prior to the reporting period but deducted within it. Depending on timings, this may mean the % shown in the Costs & Charges Disclosure will be higher than the than the equivalent annualised charge set up on the account. The same applies if a large withdrawal is instead made just before the end of the reporting period. This is because the large withdrawal reduces the average account value over the reporting period but, because of the delay from when an ongoing charge is accrued to when it is actually deducted, the total amount charge taken over the same period is higher as a % relative to the average account value. 3. Large contributions shortly before the start or end of the reporting period: If a large contribution is paid into an account shortly before the start of the reporting period, this may affect the percentage ongoing charge shown as the total deducted will include charges accrued in the month prior to the reporting period but deducted within it. This may mean the % shown in the Costs & Charges Disclosure will be lower than the than the equivalent annualised charge set up on the account. The same applies if a large contribution is instead made just before the end of the reporting period. This is because the large contribution increases the average account value over the reporting period but, because of the delay from when an ongoing charge is accrued to when it is actually deducted, the total amount charge taken over the same period is lower as a % relative to the average account value. Elevate Portfolio Services Limited trades as Elevate and is part of Standard Life Aberdeen Group. Elevate Portfolio Services Limited is registered in England ( ) at 14th Floor 30 St Mary Axe, London, EC3A 8BF and is authorised and regulated by the Financial Conduct Authority. SLE Standard Life Aberdeen, reproduced under licence. All rights reserved. 06/06

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