FinoComp announces unique Cost and Charges solution to support MiFID II reporting disclosure

Jun 28, 2018

FinoComp, the UK wealth management micro-services software business today announces the launch of an innovative Cost and Charges service; CoCa. Supporting wealth management companies, platforms and advisers, CoCa tackles the challenges faced the in the production of the annual Ex-Post Costs and charges disclosure as required by MiFID II.

From January of this year investment firms have been required to disclose an estimation of costs to the investing client in the form of an Ex-Ante disclosure and an annual statement for the Costs and Charges over the clients portfolio in the form of an Ex-Post disclosure.  These new reporting regulations require disclosure of all charges to be broken down into categories for the Investment Services provided and Costs and Charges derived from the underlying financial instruments. The information needs to make clear the effect of overall costs and charges on the return of the investment for the clients portfolio and further breakdowns for one off charges, ongoing charges, transaction related charges and any incidental costs associated with the investments.

The new FinoComp micro service CoCa offers a solution by providing 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. This portal can be seamlessly integrated with advisers or wealth managers’ systems to support client inquiries and speed up the resolution of these without additional resource. Portfolio performance is calculated using the highly accurate Internal Rate of Return and Modified Dietz methods, ensuring the impact these costs and charges have had on portfolio performance is clear and concise.

As a standalone MicroService, CoCa has no reliance on processing power from core back office technology of platforms or wealth managers, meaning ultra-fast calculations are performed with no impact on day to day system processes. Unique features of this service are that disclosures can be produced at any point throughout the year and a look through function into each category to see the specific transactions and holdings which make up the values within the categories.

A summary of what the CoCA micro service offers includes:

  • Ad-hoc production of PDFs at any point with a year to date summary if requested by clients
  • Detailed breakdown of each charge category to see which transactions and holdings have contributed to the calculations
  • Highly accurate performance reporting figures including Modified Dietz and Internal Rate of Return
  • Seamless production of yearly PDF statements with no impact on core back office technology
  • Flexibility to cater for requirements of specific wealth management firms including cross account charging, mapping of charges to categories and the treatment of FX

Ray Tubman, CEO at FinoComp said: “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.”

Tubman continued: “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.  We are delighted to be bringing to market our unique Costs and Charges micro service which will provide wealth managers, platforms and advisers with clear, accurate and aggregated data, over and above the obligations required by MiFID II”

 Founded in 2015 FinoComp offer an innovative modular approach in developing Wealth Management software as highly cohesive and loosely coupled micro-services that can work independently or be integrated with clients existing systems.  Current micro-services include a CGT calculation engine, a comprehensive Asset mastering system for platforms, a fees and charges calculation engine as well as a suite of finer grained components.  All of these micro-services solutions are designed, built and tested using cutting edge technology with scale at its core to ensure speed of delivery is combined with market leading quality.