New Calculator Handles Managed Accounts' Complex Fees

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TKS Solutions new complex fee calculator works with existing infrastructure to help wealth managers determine fees in managed accounts.

Penny Fee Calculator leverages street-tested fund accounting software to let wealth managers easily handle increasingly complex managed account fees.

There is an ongoing battle between investors trying to eke the highest returns on their investments and fund managers trying to compensate themselves. The tension between the two party’s interests has resulted in the fees associated with managed accounts becoming increasingly complex.

Simple arrangements such as 2% (based on assets) and 20% (based upon profit) used to be the norm; now it is common to see complicated tiers and performance hurdles. Crafting legal documents to reflect new terms is reasonably straightforward, but modify existing IT infrastructure and accounting applications to meet the new demand is a whole different story.

TKS Solutions, the maker of Penny-It-Works®, saw this gap and created a solution. They have taken the fee calculation engine from their flagship application and created a wrapper that facilitates the import and export of data to and from the system. The result is an application which can be easily added to an existing infrastructure to provide the functionality necessary to support the complexity that the business now demands.

This new product, dubbed the “Penny Fee Calculator™”, handles both management and incentive fees with a wide variety of complexities such as: variable rate fees (based upon an index, percent, or both), high watermarks (including adjustments and resets), hurdles and claw-backs, over-perform rates, tiered rates, and various time frames and date counts.

“We knew institutions were struggling with addressing the latest trends in fee arrangements. They were not in a position to replace, but rather were looking to enhance their existing systems. We knew that we could leverage our fee engine, which has been street-tested by the most demanding funds, and give institutions a robust, easy-to-use solution that fits neatly into their existing infrastructure.” says Ron Kashden, President of TKS Solutions, LLC.

Since its release, the Penny Fee Calculator™ has garnered a lot of interest. In addition, to serve the non-institutional market, TKS is working on a hosted web version of the Fee Calculator, which is slated for release towards the end of 2012.

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Kelly Franklin
TKS Solutions
(914) 358-0016
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