MIFID II costs and charges disclosure
I am just looking for some feedback on what people are doing (doing differently) following MIFID II regarding disclose in reports.
We mainly use Parmenion, Standard Life and Nucleus. When using SL and Nucleus we have model portoflios run by the same DFM specific to our firm.
Parmenion have updated their pre sales documentation for MIFID II, Nuclues and SL have not done so yet although I think SL have their technology upgrade this weekend. It has been difficult not knowing what SL and Nucleus are going to produce.
We have updated our fees and charges section in our reports but I'm not 100% happy as I feel we are having to feel our own way around this.
We have a table which shows in £ and % the following:
Platform / custody costs
then in a seperate section
fund trasaction costs - for the DFM models we have used a spreadsheet and aggregrated the transaction costs data having obtained this from FE
Then at the bottom it is all aggregated in £ and %
We then have a second table which shows the effect of charges on investment returns. We have assumed an invetsment return of 5% and we intend to use same rate for different risks to ensure consistency (Thoughts??) we are showing the £ amount after 1, 2 and 5 years based on 1. return of 5% without any charges and 2. 5% less the charges (based on what we have worked out as the aggregated charges in the first table).
It is all built around spreadsheets and simple formula so can be produced reasonably easily and saved on client file.
I am aware though that Parmenion are assuming 0% growth when they show the effect of charges. Different providers may chose diferrent approaches to details suchs as growth rates, time periods over which the effects of charges are shown. And these could differ from ours.
Any feedback / input gratefully received.
Should to mirror what providers are doing or have a consistent approach to all our clients?
Would it be better to signpost to provider documentation and not include in Suit Let?
Should we rely on our own spreadsheets?
I am happy to take the converstaion 'off line' if anyone wants to exchange/swap ideas in more detail what they are doing.