Free fee check

Would this fee hold up in an SEC fee review?

Enter one household's fee schedule, accounts and the amount billed. The check recomputes the fee the agreement calls for and tells you whether the billed amount matches one of the fee errors SEC examiners report most often.

  • No sign-up
  • Runs in your browser; figures are never sent
  • Printable, dated record
1

Fee schedule

As written in the advisory agreement. Rates are annual.

How breakpoints apply

2

Billing terms

How the agreement turns the annual rate into one period's fee.

Oct 1 to Dec 31 is 92 days. Used for proration and the days-based method.

3

Accounts and amounts billed

Use the value the agreement bills on, for example the period-end value or the average daily balance. Rounded or anonymized figures are fine.

Advisory fee check · getstratumquant.com/fee-check
Result for this householdQuarterly
Enter the amounts billedThe check compares them with the fee the schedule calls for.
Per agreement$0.00
Billed—
Difference—

Calculation

A calculation aid based on the figures entered. Confirm against the client's signed advisory agreement and the firm's own billing records. Not legal or compliance advice.

The figures you enter stay in this browser tab. They are not sent or saved, and closing the tab clears them.

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What the check is based on

The fee errors SEC examiners report most often.

SEC staff describe these findings in two risk alerts: a 2018 overview of the most frequent advisory fee and expense issues, and a 2021 review of how advisers calculate fees. The 2021 alert describes many of the errors as oversights, for example not updating a system after a change in billing practices.

Checked hereBreakpoints not appliedThe client crossed a breakpoint, but every dollar was billed at the starting rate.
Checked hereHousehold accounts not combinedAccounts that should have been aggregated for the breakpoint were billed one by one.
Checked hereExcluded assets billedAssets the agreement or disclosures exclude from the fee, such as legacy positions, were included in the billed value.
Checked hereNo prorationAn account opened or closed mid-period was billed for the full period.
Checked hereTiered rates miscalculated or double billingBreakpoint or tiered rates calculated incorrectly, or the same fee billed twice.
Check by handWrong valuationFor example, billing on the period-end value when the agreement calls for the average daily balance. Enter the value the agreement specifies.

Sources: SEC Office of Compliance Inspections and Examinations, Overview of the Most Frequent Advisory Fee and Expense Compliance Issues (April 12, 2018); SEC Division of Examinations, Observations: Investment Advisers' Fee Calculations (November 10, 2021).

Fee calculations for every client, approved before billing.

In StratumQuant, each client's fee is calculated from the account's average daily balance in the ledger and saved as a draft with the figures behind it. A custodian fee file is produced only after an advisor approves it.

  1. 1Calculate from the ledger's average daily balance
  2. 2Each fee saved with the balance and rate behind it
  3. 3Advisor approval before anything is billed
  4. 4Fee file and audit package after approval

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