MIFID II: Costs & Charges Q&A
Q. How are the percentages derived?
A. Charges are reported as a percentage of your investment i.e. your average monthly holdings value for the account in question for the relevant reporting period. The monthly holding value is calculated based on daily unit positions (and so includes changes in the month) with the value calculated using the monthly NAV (Net Asset Value) price as at the end of each month.
Q. Why does my statement cover a 12 month period?
A. Under the new regulations we are required to send you details of the Costs and Charges applied to your account(s) once each year. This costs and charges disclosure will be provided annually and will cover all holdings in the account it relates to and will cover the total costs and charges for the previous calendar year (i.e. 1st January to 31st December) for that account. We will send this with your quarterly statement(s), valued as at 5th January.
Q. Are IFA charges included?
A. No. The costs and charges disclosure does not include IFA charges; these will be disclosed by your IFA where applicable.
Q. Can I request an ad hoc costs and charges disclosure?
A. Unfortunately not. The costs and charges disclosure cannot be requested on an ad hoc basis. Copies of the annual costs and charges disclosure for the last period where this was calculated can be provided upon request.
Q. What are third party payments?
A. Third party payments are payments received by Aberdeen Asset Managers Ltd in connection with the investment service provided to the investor and are regarded as part of the cost of the service to the investor. For example, elements of costs paid that are then rebated to Aberdeen Asset Managers Ltd such as commissions from a third party in respect of transactions.
Q. What is the difference between Product and Service costs?
A. Product costs are specific to each Investment Trust and paid directly by the Investment Trust Company in question, whereas Service Costs are those you incur directly as a result of holding the shares in a product ‘wrapper’, like an ISA for instance.
Q. What is included in the ‘Cumulative effect’ percentage?
A. This is shows the total effect costs and charges have had on the return you have received on all of the investments held in this account over the previous calendar year.
Q. One of the Trusts in my Share Plan has been placed in receivership, liquidation or has been suspended on the stock market. Why am I receiving details of Costs and Charges when I have been advised that plan administration fees are being waived?
A. Plan administration fees are waived from the date that the company either suspended trading on the market or was placed into voluntary liquidation. As this statement is produced for the full calendar year it may include charges that have accrued prior to this date.
Q. I hold Aberdeen Standard European Logistics Income plc, why do my product charges show as zero?
A. If product cost information is not available for a full 12 month period then we are unable to report the product charges incurred during that time. As we did not have product costs for this trust for a full 12 month period at the point of statement production these will show as zero for 2018. Full product cost data will be available for 2019 and will be visible on your next costs and charges statement
For further information on service or product costs and charges, please refer to your Terms and Conditions, Key Information Document and/or Annual Report and Accounts. Copies of these documents can be found in the Literature Library.