Ensuring Correct Market Valuations Are Used for Billing: Issue #1

August 31, 2018 |

Back in April, the US Securities and Exchange Commission issued a risk alert on advisory fee billing and compliance. Of the six most frequent compliance issues they outlined, BillFin can help ensure the top five are not concerns for your fee billing (see our June article). Let’s start with issue number one: Fee Billing Based on Incorrect Account Valuations.

BillFin is extremely flexible and simple to use. The workflow is as simple as calculating fees, exporting your invoices, and then exporting your debit files. Since the first step is critically important, you will need your management fees to be correct and for that, the account valuations must be correct. Per the OCIE article, the SEC requires your billing match your ADV.

If your ADV specifies you bill on the ending/opening balance each billing period, simply tell BillFin to use that value and you’re done. If your ADV says you bill using an average daily balance over the billing period, you tell BillFin to get that value and you’re done. Likewise, if you need to exclude assets from billing, like cash, you tell BillFin that you don’t include cash in the billable assets and you’re done.

Since BillFin partners with TD, Schwab, Fidelity, RBC, and others to bring in your account data, the account data provided includes account valuations. By simply clicking a button, BillFin brings in all the account valuations from the desired partner. You then can review the valuations and even the underlying holdings making up the account total. Basically, it’s a set-it-and-forget-it system. We work closely with these partners to make your billing as easy as possible.

For those of you who do not manage accounts at one of our seamlessly integrated partners, BillFin can still help you out. BillFin allows you to upload asset values using a simple template. This easy and flexible template requires three pieces of data for valuations:

  1. Account number
  2. Valuation Date
  3. Account’s market value

If you want to add more detail and provide the underlying securities, that is also possible. Whether you upload or sync values directly from partners, BillFin will always preview the valuations provided so that you can check them before applying the billable assets. Additionally, it will do some error checking to make sure you are aware of some potential problems in your data before you apply the billable assets. Remember, you can always make edits to the billable assets before sending to your custodian.

You don’t need headaches when you bill your customers. Let BillFin take over and give you peace of mind that you have a consistent system that handles your billing correctly. I mean, it can even fetch the account valuations for you – what’s easier than that?