- Go to Funds
- Pick Fund Fee Type from the left-hand side
- Enter a Name for the fee type you are creating
- Choose the Percent range fee type
- Select the Apply fee button
Next select Edit from the left side of the screen
- Select the fee ladder checkbox
- Choose if you are determining the charge based on the Average Daily balance or not (the default is to charge based on balance when the fees are run)
- Enter an amount if you wish to have a minimum charge per year
- For laddered or tiered fees, enter the starting minimum balance in the Fund into the first box, then add the % charged in the second column (ie. 0, 0.01)
- Choose which Fund(s) the tiered fund fee applies to
- Select Update when done
You can also add a minimum fee along with the tiered fees to make sure the Fund(s) are paying your administrative costs.
Example Admin Fee Tiers are
- Fund Balance is $0 - 249,999.99, charge .01% (1%)
- Fund Balance is $250,000 - 499,999.99 charge .0085% (.85%)
- Fund Balance is $500,000 - 999,999.99 charge .0075% (.75%)
- Fund Balance is over $1,000,000 charge .0065% (.65%)
If a fund advisor or an organization has multiple funds that you hold, you may wish to tier fees based on the total value of all associated funds.
Example: if there are three funds with $250,000 each, and you applied the admin fee based on the total of each fund the fees would be:
- 1% x 250,000 x 3 = $7500 in fees.
If you employ a tiered calculation for Admin Fees and consolidate the funds, the result is:
- 1st Fund total is $250,000 x .01 = $2500
- 2nd Fund total is $250,000 x .0085 = $2125
- 3rd Fund total is $250,000 x .0075 = $1875
The total is now $6500 in fees for the organization, or $1000 less than the first example.
Using Tiered Admin Fees helps foundations to not penalize organizations that create more than one fund for different purposes.