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09. Platform Fees
1) How is the platform fee being charged? Is it deducted from my holdings?
2) How does FSM notify me about the platform fees that I need to pay?
3) How do I know how many units of my holdings will be deducted for the platform fees?
4) When is the valuation date for the units to be deducted for platform fees and when will the units be deducted from my holdings?
5) How does FSM identify the best performing fund?
6) Will FSM notify me after the units are deducted?
7) What is AUM?
8) Is the AUM in my personal account and beneficiary accounts combined?
9) What are the platform fee charges?
10) How do I calculate the “Average daily AUM”?
11) How do I calculate the amount of platform fees that I need to pay?
12) How to calculate quarterly platform fees for Fixed Income fund holdings?
13) How to calculate quarterly platform fees for Equity fund holdings?
14) How does FSM calculate the platform fees if I have both Equity and Fixed Income funds in my account(s) by different payment methods i.e. Cash, SRS and CPF-OA and SA?
15) How do you charge the platform fee if I sell off my holdings before the end of quarter?
16) How do you charge the platform fee if I transfer-out my holdings before the end of quarter?
17) What is the GST?
18) Any exceptional funds with different charges?
| Q: |
How is the platform fee being charged? Is it deducted from my holdings? |
| A: |
Platform fee applies to all cash and SRS holdings. The fee will be accrued daily and deducted on quarterly basis. The billing quarter ends on the last day of February, May, August, and November. Quarterly platform fee will be deducted around middle of the following month of each billing quarter i.e. middle of March, June, September and December.
By default, quarterly platform fee will be deducted from Nikko AM Shenton ShortTerm Bond Fund (formerly known as DBS Enhanced Income Fund), or from Cash Fund holding if there is insufficient Nikko AM Shenton ShortTerm Bond Fund holding. Should there be insufficient balance in both Nikko AM Shenton ShortTerm Bond Fund and Cash Fund holdings upon deduction, the quarterly platform fee will be deducted from the best performing fund as at the end of the billing quarter. As such, based on the billing and deduction cycle, please ensure that you have sufficient monies in your Nikko AM Shenton ShortTerm Bond Fund or Cash Fund by 15th of the deduction month if you do not wish for the best performing fund to be deducted.
In summary, the platform fee of Cash and SRS holdings respectively will be deducted in the form of units from the following fund by respective payment method as well as by sequence:
1. Nikko AM Shenton ShortTerm Bond Fund (formerly known as DBS Enhanced Income Fund)holdings (What is this?)
2. Cash Fund holdings
3. Best Performing fund |
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| Q: |
How does FSM notify me about the platform fees that I need to pay? |
| A: |
The Quarterly Platform Fee Invoice will be sent out together with Aug, Nov, Feb and May e-statements after the platform fees deduction and we do not send out physical invoices. |
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| Q: |
How do I know how many units of my holdings will be deducted for the platform fees? |
| A: |
The amount for platform fees in dollar value will be stated in the invoice sent to you and thereafter, equivalent units will be deducted from your holdings. The units to be deducted will base on the price on the last working day of billing quarter, i.e. 28 Feb, 31 May, 31 Aug and 30 Nov or the latest available price will be used if the price is not available upon deduction.
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| Q: |
When is the valuation date for the units to be deducted for platform fees and when will the units be deducted from my holdings? |
| A: |
The valuation will be according to the closing price on the last working day of billing quarter, i.e. 28 Feb, 31 May, 31 Aug and 30 Nov or the latest available price will be used if the price is not available upon deduction. The deduction will be processed around the middle of these months i.e. March, June, September & December.
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| Q: |
How does FSM identify the best performing fund? |
| A: |
The best performing funds will be identified base on profit or loss on the last day of the billing quarter. |
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| Q: |
Will FSM notify me after the units are deducted? |
| A: |
Yes, you will receive a confirmation email from us after the units equivalent to the due platform fees are deducted from your holdings. |
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| A: |
AUM stands for Assets Under Management. It is defined by the total value of your holdings, based on their daily indicative price. There are 2 types of AUM in computing platform fees i.e. Chargeable AUM and Non Chargeable AUM.
Chargeable AUM is the total value of holdings that are deductible for platform fees i.e. Cash and SRS (IA) Unit Trusts holdings whereas Non Chargeable AUM is referring to total asset value under your account including USD cash account deposits, SRS (non IA), CPF-OA and SA holdings. |
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| Q: |
Is the AUM in my personal account and beneficiary accounts combined? |
| A: |
Yes, the total value of your holdings based on their daily indicative price in both personal and beneficiary account(s) under your name will be combined in computing the platform fees. |
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| Q: |
What are the platform fee charges? |
| A: |
| Holdings |
Platform Fee |
| Fixed Income Funds Holdings * ^ |
0.05%
per quarter |
| Equity Funds Holdings * - first S$50,000.00 |
0.125%
per quarter |
| Equity Funds Holdings * - next S$150,000.00 |
0.11%
per quarter |
| Equity Funds Holdings * - next S$300,000.00 |
0.09%
per quarter |
| Equity Funds Holdings * - remaining amount above S$500,000.00 |
0.05%
per quarter |
| All CPF Holdings |
Exempted |
All fees and sales charges quoted are exclusive of GST.
* Platform fee is applicable to Cash and SRS (IA) holdings only. |
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| Q: |
How do I calculate the “Average daily AUM”? |
| A: |
Average daily AUM = Total AUM for period / No. of days in the quarter
= (Indicative value of Day 1 + Indicative value of Day 2 + …… + Indicative value of Last Day of the quarter) / Total number of days in the quarter
Example 1:
Client A has bought Fund A at S$1 per unit for S$100,000 on 1 Sept 2010. “Total AUM for period” will start from 1 Sept 2010 until last day of the quarter i.e. 30 Nov 2010.
Indicative value of AUM on 1 Sept for price at S$1 is S$1 x 100,000 units = S$100,000
Indicative value of AUMon 2 Sept for price at S$1.01 is S$1.01 x 100,000 units = S$101,000
Indicative value of AUM on 3 Sept for price at S$1.04 is S$1.04 x 100,000 units = S$104,000
Indicative value of AUM on 4 Sept for price at S$1.09 is S$1.09 x 100,000 units = S$109,000
......
Indicative value of AUM on 29 Nov for price at S$1.07 is S$1.07 * 100,000 units = S$107,000
Indicative value of AUM on 30 Nov for price at S$1.06 is S$1.06 * 100,000 units = S$106,000
Hence the total “Total AUM for period” for that particular quarter is as following.
Average Daily AUM = (S$100,000 + S$101,000 + S$104,000 + S$109,000 + ... ... + S$107,000 + S$106,000) / 91 days for Sept 2010, Oct 2010 and Nov 2010 |
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| Q: |
How do I calculate the amount of platform fees that I need to pay? |
| A: |
a) Calculate “Average daily AUM” for each payment method i.e. Cash or SRS (IA) under your account(s)
Average daily AUM = Total AUM for period / No. of days in the quarter
b) Sum up “Average daily AUM” that falls within the same fee tier i.e. Equity or Fixed Income
c) Calculate quarterly platform fee rate on the Average daily AUM i.e. 0.05% for Fixed Income and different tiers for Equity (Refer to question 10).
d) Calculate Aggregate Percentage for each payment method i.e. Cash or SRS (IA)
Aggregate Percentage = {Quarterly Platform Fee Rate / Average daily AUM (Chargeable and Non Chargeable AUM)} x 100%
e) Calculate platform fees for each payment method i.e. Cash or SRS (IA) base on the Aggregate Percentage
Platform Fees = Daily average AUM x Aggregate Percentage |
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| Q: |
How to calculate quarterly platform fees for Fixed Income fund holdings? |
| A: |
Example 2:
Average Daily AUM for Fund A cash holdings = S$15,000.00
Average Daily AUM for Fund B SRS (IA) holdings = S$15,000.00
Total chargeable Average Daily AUM for the above = S$30,000.00
The quarterly platform fees flat rate for Fixed Income holding: 0.05% per quarter
Platform Fees for Fund A cash holdings = Average daily AUM x 0.05%
= S$15,000.00 x 0.05%
= S$7.50
Platform Fees for Fund B SRS (IA) holdings = Average daily AUM x 0.05%
= S$15,000.00 x 0.05%
= S$7.50
Platform fees for Fixed Income holdings: S$7.50 + S$7.50 = S$15.00 per quarter |
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| Q: |
How to calculate quarterly platform fees for Equity fund holdings? |
| A: |
By 'incremental basis', the fees you pay vary with the amount of your holdings.
0 – S$50K AUM – 0.125% per quarter
S$50K – S$200K AUM – 0.11% per quarter
S$200K – S$500K AUM - 0.09% per quarter
> S$500K AUM – 0.05% per quarter
Example 3:
3.1) FIRST tier S$0 – S$50K AUM
Daily Average AUM for Fund A cash holdings = S$20,000
Daily Average AUM for Fund B SRS (IA) holdings = S$10,000
Total chargeable daily average AUM for the above = S$30,000
As the AUM falls into 1st tier 0 – S$50K AUM, the platform fee is 0.125% per quarter.
Platform fee rate for Equity fund holdings: 0.125%
Total Platform fee payable: S$30,000.00 x 0.125% = $37.50 per quarter
3.2) SECOND tier S$50K – S$200K AUM
Daily Average AUM for Fund A cash holdings = S$100,000
Daily Average AUM for Fund B SRS (IA) holdings = S$70,000
Total chargeable daily average AUM for the above = S$170,000
As the AUM falls into 2nd tier S$50K – S$200K AUM and hence the platform fee is as following.
Platform fee rate for first S$50K Equity fund holdings: 0.125%
Platform fee rate for the next S$150K Equity fund holdings: 0.11%
Platform fee on the first S$50,000 = 0.125% x S$50,000 = S$62.50
Platform fee on the remaining S$120,000 = 0.11% x S$120,000 = S$132
Total Platform fee payable = S$194.50 per quarter
The aggregate platform fee rate for the total portfolio in this case = S$194.50 / S$170,000 x 100%
= 0.1144117 %
3.3) THIRD tier S$200K – S$500K AUM
Daily Average AUM for Fund A cash holdings = S$200,000
Daily Average AUM for Fund B SRS (IA) holdings = S$200,000
Total chargeable daily average AUM for the above = S$400,000
As the AUM falls into 3rd tier S$200K – S$500K AUM and hence the platform fee is as following.
Platform fee rate for first S$50K Equity fund holdings: 0.125%
Platform fee rate for the next S$150K Equity fund holdings: 0.11%
Platform fee rate for the next S$300K Equity fund holdings: 0.09%
Platform fee on the first S$50,000 = 0.125% x S$50,000 = $62.50
Platform fee on the next S$150,000 = 0.11% x S$150,000 = $165
Platform fee on the remaining S$200,000 = 0.09% x S$200,000 = $180
Total Platform fee payable = S$62.50 + S$165 + S$180 = S$407.50 per quarter
The aggregate platform fee rate for the total portfolio in this case = S$407.50 / S$400,000 x 100%
= 0.101875 %
3.4) FOURTH tier > S$500K AUM
Daily Average AUM for Fund A cash holdings = S$500,000.00
Daily Average AUM for Fund B cash holdings = S$400,000.00
Total chargeable daily average AUM for the above = S$900,000
As the AUM falls into 4th tier > S$500K AUM and hence the platform fee is as following.
Platform fee rate for first S$50K Equity fund holdings: 0.125%
Platform fee rate for the next S$150K Equity fund holdings: 0.11%
Platform fee rate for the next S$300K Equity fund holdings: 0.09%
Platform fee rate for amounts above S$500K Equity fund holdings: 0.05%
Platform fee on the first S$50,000 = 0.125% x S$50,000 = S$62.50
Platform fee on the next S$150,000 = 0.11% x S$150,000 = S$165
Platform fee on the next S$300,000 = 0.09% x S$300,000 = S$270
Platform fee on the remaining S$400,000 = 0.05% x S$400,000 = S$200
Total Platform fee payable = S$62.50 + S$165 + S$270 + S$200 = S$697.50 per quarter
The aggregate platform fee rate for the total portfolio in this case = S$697.50 / S$900,000 x 100
= 0.0775 % |
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| Q: |
How does FSM calculate the platform fees if I have both Equity and Fixed Income funds in my account(s) by different payment methods i.e. Cash, SRS and CPF-OA and SA? |
| A: |
Chargeable AUM is the total value of holdings that are deductible for platform fees whereas Total Unit Trusts and Cash Account AUM is referring to total asset value under your account including Chargeable AUM and non chargeable AUM i.e. USD cash account deposits, SRS (non IA), CPF-OA and SA holdings.
We will consider total unit trust holdings including Chargeable AUM and Non Chargeable AUM in computing the platform fees for the purposes to benefit our clients from lower rates based on the different tiers. The aggregate percentage for the annual platform fees could be lowered down than the actual aggregate percentage on chargeable holdings i.e. Cash and SRS holdings. Investors with large portfolio values will now be able to experience lower platform fee rates.
Fixed income funds will continue to be charged at 0.05% per quarter. USD cash account deposits, SRS (non IA), CPF-OA and SA holdings remain exempted from platform fee.
Please refer to the Example 4 below.
Personal Account:
Equity fund holdings:
Daily Average AUM for Fund A SRS (IA) holdings = S$100,000
Daily Average AUM for Fund A CPF-OA and SA holdings = S$200,000
Fixed Income fund holdings:
Daily Average AUM for Fund B SRS (IA) holdings = S$100,000
Daily Average AUM for Fund B CPF-OA and SA holdings = S$200,000
Daily Average AUM for Cash fund: S$200,000
Beneficiary Account:
Equity fund holdings:
Daily Average AUM for Fund A cash holdings = S$100,000
Fixed Income fund holdings:
Daily Average AUM for Fund B cash holdings = S$100,000
Total chargeable daily average AUM for the Fixed Income fund holdings = S$200,000
Total chargeable daily average AUM for the Equity fund holdings = S$200,000
Total chargeable and non chargeable daily average AUM (for lower platform fee rates) = S$1,000,000
Platform fees for Fixed Income fund holdings = Average daily AUM x 0.05 %
= S$200,000 x 0.05%
= S$100 per quarter
As the total chargeable average AUM and non chargeable average AUM for equity funds falls into 4th tier > S$500K AUM and hence the platform fee is as following.
Platform fee rate for first SS$50K : 0.125%
Platform fee rate for the next S$150K : 0.11%
Platform fee rate for the next S$300K : 0.09%
Platform fee rate for amounts above S$500K : 0.05%
Platform fee on the first S$50,000 = 0.125% x S$50,000 = S$62.50
Platform fee on the next S$150,000 = 0.11% x S$150,000 = S$165
Platform fee on the next S$300,000 = 0.09% x S$300,000 = S$270
Platform fee on the remaining S$500,000 = 0.05% x S$500,000 = S$250
Total Platform fee payable= S$62.50 + S$165 + S$270 + S$250 = S$747.50 per quarter
The aggregate platform fee rate for the total portfolio in this case = S$747.50 / S$1,000,000.00 x 100% = 0.07475 %
However, we will not be charging platform fee on the full 1 million. This is just the lowered rate we will be applying on the relevant equity holdings.
Platform fees for Equity fund holdings = Chargeable daily average AUM for Equity x Aggregate %
= S$200,000.00 x 0.07475%
= S$149.50 per quarter
Note:
The Platform Fee of respective payment method (Cash or SRS) will be deducted from the respective parking facility fund (PFF) or best performing fund.
Platform Fee of Cash Holding: It will be deducted from Cash PFF or best performing fund.
Platform Fee of SRS Holding: It will be deducted from SRS PFF or best performing fund.
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| Q: |
How do you charge the platform fee if I sell off my holdings before the end of quarter? |
| A: |
If you sell all of your holdings before the end of the quarter, the accrued platform fee will be deducted from your sales proceeds. If you sell a portion of your holdings only, then the platform fee will continue to be accrued, and deducted at the end of the quarter as per normal. |
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| Q: |
How do you charge the platform fee if I transfer-out my holdings before the end of quarter? |
| A: |
If you transfer all of your holdings before the end of the quarter, the accrued platform fee will be deducted from following transferred out fund by sequence:
1. Nikko AM Shenton Shorterm Bond SGD fund, or
2. Cash Fund, or
3. Best performing fund.
If you transfer a portion of your holdings only, then the platform fee will continue to be accrued, and deducted at the end of the quarter as per normal. |
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| A: |
From 1 September 2010, Goods and Services Tax (GST) will be charged with the GST amount. The GST will be charged upon upfront sales charge when you perform a buy transaction or during a platform fee deduction. Please refer to the following example for your reference.
Example 1: Upon up front sales charge
Investment amount: S$1000
Sales Charge: 1.25%
GST: 7%
Net investment amount
= S$1000 – (S$1000 x 1.25% + 7% GST)
= S$1000 – (S$12.50 + 7% GST)
= S$1000 – S$13.375
= S$986.625
Example 2: Upon platform fee deduction
Average AUM for Equity funds: S$50K
Quarterly platform fee = S$50K x 0.125% = S$62.50
GST = S$62.50 x 7% = S$4.375 |
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| Q: |
Any exceptional funds with different charges? |
| A: |
Please refer to the following table for exceptional fund(s) where their platform fee rate might be different from the standard platform fee rate.
| Fund Name |
Category |
Platform Fees |
| HSBC Turbo Double 8 USD |
Structured Product |
Waived |
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For further assistance, call our helpline at 6557 2853 from 9am to 6pm on Mondays to Fridays (excluding weekends & public holidays).
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CPFIS Registered Investment Administrator
