The Fund Administration Fee explained

The Fund Administration Fee explained

RDR regulations require an investment service such as ours to charge you directly for the administration services we provide. We’ve therefore introduced the Fund Administration Fee.

This fee applies to all holdings in ‘clean share class’ funds in your account. You may have chargeable holdings for a number of reasons. These can include:

  • you’ve bought the fund,
  • you’ve transferred it into your account.
  • we’ve switched a ‘bundled share class’ units to ‘clean share class’ unit when you transferred this to us.
  • we’ve converted an existing bundled holding to ‘clean share class’ units.
  • or your fund is one which has always been considered ‘clean’ and no conversion was necessary.
The fee is not charged for any fund where we also receive trail commission from the fund manager.

From 1 January 2016 we will no longer receive any trail commission and all fund holdings will be liable to the Fund Administration Fee.

When will the fee be charged?

The Fund Administration Fee is calculated quarterly on 31 January, 30 April, 30 June and 31 October each year. You’ll always receive a notification telling you the amount due before the charge is applied 14 working days later.

The fee is 0.35% per year on the value of your chargeable fund holdings, and is calculated on the daily value of your holdings. The minimum charge of £35 per year, where it applies, is again calculated daily.

How is the fee calculated?

At the end of every day we take the value of each of your funds and multiply it by the daily percentage charge, this is the annual charge of 0.35% divided by the 365 days of the year. 

We add up the charge for each of your funds for the day to get the day’s total fee. From 1 November, if the total daily calculated fee is less than the daily minimum fee (£35 annual fee divided by 365) then the daily minimum fee will apply. 

At the end of each quarter when we calculate your fee we add up all the daily fees to give your total charge for the period.

The fund fee starts being charged when a purchase settles on your account and stops accruing when a sale settles. The fund fee is only payable on the first £500,000 of chargeable funds which again is calculated daily.

So how do these figures work out?

Example 1
If you have just one clean fund holding worth £2,000.

For one day we calculate £2,000 x (0.35% annual charge / 365 days) = 1.92p.

The minimum daily charge however is 9.58p (£35 per year minimum charge / 365 days) so this would be the charge applied each day that the calculated charge is below 9.58p.

From 1 November the minimum charge of £35 per year applies and this is applied to the daily calculation.

At the end of the charge period, normally a calendar quarter, we then add up the daily total fees to get your total charge for the quarter.  This assumes you have made no other purchases or sales.

If we imagine that the value of your fund stays at £2,000 for each day of the charge period, and there are 91 days in the quarter, we add up the daily total fees to get your total charge for the quarter: 91 x 9.58p = £8.72.  This would be your Fund Administration Fee charge for the quarter.
Example 2
You have ten ‘clean’ fund holdings, each worth £2,000

As above, for one day we calculate £2,000 x (0.35% annual charge / 365 days) = 1.92p for each fund.

We add up the charge for all your chargeable funds which is 10 x 1.92p; so your charge for that day is 19.2p.

These calculations are then repeated every day, and in reality the values of each of your funds would vary.

As in the above example, we make the same assumptions around the value remaining the same, no further purchases or sales, and a standard quarter charge period.

At the end of the charge period  the charge calculation is 91 x 19.2p = £17.47.  This would be your Fund Administration Fee charge for the quarter.

Paying the Fund Administration Fee

When you receive your Fee Notification you should make sure that you have a sufficient cash balance available to cover this, remembering it will be debited in the same way you pay your other fees - so it'll either be taken from your investment account or from your nominated bank account.

If you pay your fees from your bank account, this keeps the money in your Barclays Stockbrokers portfolio for making your investments. Remember this is especially important for your ISAs and SIPPs to maximise your tax efficient investing.

If you want to set up a direct debit [PDF, 241KB] to pay fees from your bank account, then please send us a completed form (please allow 10 business days for this to be set up).

Alternatively you can pay the Fund Administration Fee by debit card once you’ve received the notification letter. You can do this online or by calling us on 0800 279 6551* or our local number 0141 352 3909*.

*Calls to 0800 numbers are free if made from a UK landline and calls to 0141 numbers are charged at local rate, mobile costs may vary - please check with your telecoms provider. Calls may be recorded so that we can monitor the quality of our service and for security purposes. Our opening hours are 7.30am to 7pm Monday to Thursday, 7.30am to 6pm on Friday (excluding bank holidays) and 9.30am to 12.30pm on Saturday.

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