Rev. Date February 13, 2024

Advisory businesses that charge a fee for their services often need to show portfolio performance net of the advisory fees for client reporting and investment proposals to help stay compliant with the SEC Marketing Rule.

Users can specify advisory fees for any portfolio in Report Lab by clicking on the “Manage Fees” button at the bottom of the subject input panel. Please note that Advisory Fees will be saved at the report level.

How will advisory fees impact my report?

The advisory fee will be deducted from the portfolio’s pro forma return time series and any analysis will run on the net of fee return stream. All tables and chart labels will specify the advisory fee imposed for each portfolio. Only a flat advisory fee can be imposed at the total portfolio level.

Will adding an advisory fee to a portfolio impact the returns of the underlying investments?

If you add a fee to a portfolio, the fees will only be applied at the total portfolio level and not impact the individual underlying investments, even if they are in the same report or analysis block.

Can I input an advisory fee outside of Report Lab?

Currently, Venn only offers the inclusion of an advisory fee within the context of Report Lab. The intention of including advisory fees is to clearly represent the impact of fees when presenting performance information to external stakeholders.

Will adding an advisory fee impact the return of portfolios outside of Report Lab?

Inputting advisory fees on portfolios in Report Lab will not impact the return of those portfolios outside of Report Lab.

Can I input different advisory fees on the same portfolio?

The advisory fee is specific to the selected report, therefore the same portfolio can have a different fee associated with it in a different report. You can also unlink the analysis block from Global Configuration to input a different fee level within the same report.

Can I exclude investments in my portfolio from the advisory fees?

You can exclude investments in your portfolio from advisory fees by clicking on “Manage Fees” in the inputs panel, then on the “Exclude Investments” drop down. This will open up the list of underlying investments within your portfolio, and you can uncheck any investments to exclude them from the set portfolio advisory fee you had entered for the overall portfolio. For the avoidance of doubt, you can currently only exclude an investment from the overall portfolio’s advisory fee. You cannot change the fee to a different non-zero amount for any given investment.

If one or more investments are excluded from the advisory fee, a footnote will be added indicating that certain investments have been excluded from the stated advisory fee. The list of specific investments that have been excluded will be listed in the “Investments excluded from advisory fees” section of the disclosure page at the end of the report.

This document highlights certain aspects of this feature. As an overview, it does not discuss all material facts or assumptions. Please see Important Disclosure and Disclaimer Information.