Wealth management tech services provider FinoComp has launched a new tool to overcome difficulties associated with MiFID II's costs and charges requirements.
MiFID II requires firms to provide clients with an estimation of costs in the form of an 'Ex-Ante' disclosure, as well as an annual statement for the costs and charges over client's portfolio in the form of an Ex-Post disclosure.
The information provided needs to make clear the effect of overall costs and charges on the return of the investment for a client's portfolio, breaking down fone off charges, ongoing charges, transaction related charges and any incidental costs associated with the investments.
There has been concern about both the clarity and accuracy of information being provided to clients, which could be examined when the Financial Conduct Authority assesses the impact on MiFID II this summer.
FinoComp's CoCa tool aims to provide a clear and aggregated breakdown of Ex-Post costs and charges disclosures with a choice of outputs to produce PDFs and XML files for integration with existing systems or print vendors, as well as an innovative web portal with a look through function.
The firm said the portal can be integrated with advisers or wealth managers' systems to support client inquiries, and speed up the resolution.
It calculates portfolio performance using the internal rate of return and modified dietz methods, which FinoComp said ensures the impact these costs and charges have had on portfolio performance is "clear and concise".
FinoComp CEO Ray Tubman said: "Any regulation that helps to improve transparency, competition and accountability around pricing of course has to be a good step, the challenge however in the past has been how to make sure that both the data and communications are accurate and consistent.
"Providing accurate effective communication of costs and charges including services and products across the distribution chain can offer a significant challenge.
"Our new costs and charges services not only provides all the necessary data required to fulfill the regulatory obligations in a concise format, but also supports the end client providing a detailed breakdown of each charge category accessible throughout the term of the investment."
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