At Riskalyze, we believe in promoting clear and objective communication between you and your clients.
Illustrating the impact of advisory fees on a portfolio is a crucial part of this. It allows you to,
✔️ Set and manage expectations with your clients
✔️ Accurately forecast portfolio performance
✔️ Demonstrate the long-term savings you offer to prospects
In This Article
- Setting Up Your Fee Schedules
- Building Individual Fees
- Managing Annual Minimums and Maximums
- Setting a Default Schedule
- Using Fees with Client Portfolios
- Setting Up a Custom Fee Schedule
- Effective Advisory Fee
Setting Up Your Fee Schedules
To get started, navigate to your Settings page in Riskalyze by clicking on the ≡ icon (top right of your screen) >> Settings.
Under Account Details, select the Advisory Fees tab. Here you’ll find your previously saved fee schedules, along with the option to create new ones.
Building Individual Fees
After selecting the +New Fee Schedule option, you’ll move into the fee builder. From here, you’ll notice an assumed range of $0 to 'No Maximum'. Fees can be created in one of three ways:
Flat Fees: To set up a flat fee, applying the same percentage to all assets, simply set the fee percentage and name your fee. That's it!
Tiered Fees: Apply a single rate to a client account based on its total value with a Tiered Fee. To create a Tiered Fee, simply set the fee calculation toggle to "Tiered" and define a maximum within your fee range, and we’ll automatically create an additional range starting at one dollar more than the maximum you set. You can set a rate for each range you define.
Progressive Fees: Apply different fees to ranges of assets within an account by setting up a Progressive Fee. To build a progressive advisory fee schedule, toggle your Fee Calculation to "Progressive", and define your asset ranges and rates as above.
Note: Progressive Fees are calculated like your taxes, with one rate applied to a range of assets within an account, and another rate applied any assets over a certain range. For example, if a fee schedule has two ranges, with the first ending at $1,000,000, then any account with more than $1,000,000 using that schedule will have two percentages applied. The first $1,000,000 would be assessed the percentage set in the first range, but anything further would be assessed the percentage set in the second range.
Managing Annual Minimums and Maximums
If you cap your annual advisory fees or define an annual minimum, that can easily be configured in Riskalyze. To do this, enter your annual maximum and/or minimum under the Maximum Fee and Minimum Fee sections of the fee builder.
Setting a Default Schedule
You can set up as many fee schedules as you like, but if you’d like to set one up as your default schedule and apply it to all your accounts, click the More Options icon (•••) on the desired fee schedule, and select Set As Default.
Using Fees with Client Portfolios
Within a current or proposed portfolio, fees are accessible for each account through the Advisory Fees account view. Click Current Holdings under the account name to access the Views menu, then select Advisory Fees. Here you can choose to create a custom fee schedule, exclude the account from fees, or choose a saved fee schedule to apply to the account. If you’ve set up a default fee schedule, you’ll notice that this schedule has been selected automatically.
Don't see the Advisory Fees menu on a shared client account? Advisors can only set fees for clients they own. The Advisory Fees menu on investment accounts will be hidden when viewing a client shared to you by another advisor in your firm.
Setting a Custom Fee Schedule
Selecting Custom Fee Schedule will allow you to build a fee schedule specific to a single account. Clicking this option will move you into a fee builder just like the one in Settings, where you can create a flat or tiered fee, and set an annual maximum.
Effective Advisory Fee
The Effective Advisory Fee rate can be seen for any client portfolio in the right margin of the screen, under its PAR, Annual Dividend, and Expense Ratio. The Effective Advisory Fee presents an annualized advisory fee as a percentage of the portfolio's total assets at a given time, considering the unique fee schedules applied to each account in the portfolio, as well as any accounts waived from fees.