'Fee Checker' - The solution for fee control

As the trustees of pooled vehicles, pooled investment funds or funds of funds, Capital Management Companies (CMCs) are responsible for the correct application and billing of the contractually agreed fee schedules. Especially when asset management or billing has been outsourced, the CMC needs to be able to check the fees being charged for auditing purposes and as a matter of vital self-interest.

In this context, different fees and costs are charged by different parties: either by the CMC itself (eg. fees for asset management, administration, (out-) performance and commissions or flat fees) or by third parties (providers of asset services or custodian fees).

The challenge for the CMC is therefore to ensure that all the fees charged are in accordance with the contractual terms, justified by actual performance and correctly calculated.

An automated fee control system makes this process simple, fast and auditable.

Development of a fee-controlling solution with core features that address these problems:

• Accuracy test Fees must be calculated and invoiced correctly

• Legitimacy test The charges or fees must be relevant to the  fund or legal entity being charged.

• Permissibility check There must be a contractual basis for the specific fees.

• Consistency check Criteria must be applied consistently and and all check processes must be traceable.

The solution: Combination calculo & integrio

To solve this challenge, we created an advanced, automated fee control solution: a combination of two proven Sowatec solutions:

Firstly calculo, our comprehensive fee management system is used to maintain an internal rate card and calculate the expected fees, and secondly integrio is used to provide the smart workflow to automate and control the processes involved in the review and reconciliation.

Sowatec's 'Fee Checker' includes the import of the billing data of the service provider, the fee calculations as well as their reconciliation and possible escalation process.

If 'Fee Checker' detects a formal error after importing the data, the bill is immediately rejected and returned to the service provider. If a settlement differs from the expected result during the comparison check, integrio will use pre-set tolerance values to decide whether the settlement must be subjected to a further check. This means that if the deviation exceeds the predefined parameters, the system escalates to a higher-level position.