The Plan Charges steps in Genovo have been designed to allow you to summarise the charges of a plan clearly and concisely, and in a 'MiFID II-friendly' format that the client can still easily understand. Within Genovo, plan charges are split into four categories:
- Product
- Platform
- Adviser
- Investment Management
It is anticipated that these four categories will accommodate all plan charges. You should include the combined total of all investment-related charges in the 'Investment Management' field. This could include, amongst others, the AMC / TER / OCF, as well as any additional transaction or DFM / DIM charges. If you want to provide a granular break down of the investment-related charges that make up the 'Investment Management' charge, this can be achieved within the plan's investment strategy.
The charges can be entered as a percentage or monetary value. If you enter a percentage charge, the equivalent monetary charge will be automatically calculated for you. However, this can be overwritten if required (e.g. it does not match the figure included in the provider's illustration due to differences in calculation methods). The combined total of the plan's charges is also automatically calculated for you.
A summary of all the plan's charges is then displayed within the charges table included in the step as well as the resultant report.
The formulas used to calculate the charges in monetary terms typically take into account:
Existing plans
Current plan charges
- The current fund value of the plan.
- The total amount being invested into the plan over the next 12 months (including current regular contributions).
- The total amount being withdrawn from the plan over the next 12 months (including current regular income).
Revised plan charges
- The current fund value of the plan.
- The total amount being invested into the plan over the next 12 months (including any revised regular contributions or new lump sum investment)
- The total amount being withdrawn from the plan over the next 12 months (including any revised regular income or lump sum being withdrawn from the plan).
- Any initial one-off charges that are incurred as a result of the recommendation being made are deducted before the recurring annual charge is calculated.
New plan recommendations
- The net lump sum amount being invested (including transfers-in).
- Any regular contributions being invested into the plan over the next 12 months.
- The total amount being withdrawn from the plan over the next 12 months .
- Any initial one-off charges are deducted before the recurring annual charge is calculated.
Formulas
Here's a summary of the formulas that are used to calculate the monetary charges in the highlighted sections.
Review of Your Existing Investments
Current Plan Charges
Fund Value (source = Plan Summary step)
Plus
Monthly Investment * 12 (source = Plan Summary step)
Minus
Annualised Income (source = Plan Summary step)
Multiplied by
Total Annual Recurring Charge % (source = Current Plan Charges step)
Revised Plan Charges
Fund Value (source = Plan Summary step)
Plus
Top-up Amount (source = Recommended Contribution step)
Plus
Transfer-in Amount (source = Recommended Contribution step)
Plus
Either (if there is a revised monthly contribution)
Revised Monthly Contribution * 12 (source = Recommended Contribution step)
Or (if there isn’t a revised monthly contribution)
Monthly Contribution * 12 (source = Plan Summary step)
Minus
Lump Sum (source = Recommended Withdrawal step)
Minus
Either (if there is a Revised Annualised Income)
Revised Annualised Income (source = Recommended Withdrawal step)
Or (if there isn’t a Revised Annualised Income)
Annualised Income (source = Plan Summary step)
Minus
Total Initial One-off Charge (source = Revised Plan Charges step)
All multiplied by
Total Annual Recurring Charge % (source = Revised Plan Charges step)
Review of Your Existing Pension Plans
Current Plan Charges
Fund Value (source = Plan Summary step)
Plus
Gross Monthly Personal Contribution * 12 (source = Plan Summary step)
Plus
Gross Monthly Employer Contribution * 12 (source = Plan Summary step)
Multiplied by
Total Annual Recurring Charge % (source = Current Plan Charges step)
Revised Plan Charges
Fund Value (source = Plan Summary step)
Plus
Top-up Amount (source = Recommended Contribution step)
Plus
Transfer-in Amount (source = Recommended Contribution step)
Plus
Either (if there is a revised monthly personal contribution)
Revised Gross Monthly Personal Contribution * 12 (source = Recommended Contribution step)
Or (if there isn’t a revised monthly personal contribution)
Gross Monthly Personal Contribution * 12 (source = Plan Summary step)
Plus
Either (if there is a revised monthly employer contribution)
Revised Gross Monthly Employer Contribution * 12 (source = Recommended Contribution step)
Or (if there isn’t a revised monthly employer contribution)
Gross Monthly Employer Contribution * 12 (source = Plan Summary step)
Minus
Partial Transfer-out Amount (source = Recommended Withdrawal step)
Minus
Tax-Free Lump Sum (source = Recommended Withdrawal step)
Minus
Taxable Lump Sum (source = Recommended Withdrawal step)
Minus
Total Initial One-off Charge (source = Revised Plan Charges step)
All multiplied by
Total Annual Recurring Charge % (source = Revised Plan Charges step)
Review of Your Existing Retirement Income Plans
Current Plan Charges
Crystallised Fund Value (source = Plan Summary step)
Plus
Uncrystallised Fund Value (source = Plan Summary step)
Plus
Gross Monthly Contribution * 12 (source = Plan Summary step)
Minus
Annualised Income (source = Plan Summary step)
Multiplied by
Total Annual Recurring Charge % (source = Current Plan Charges step)
Revised Plan Charges
Crystallised Fund Value (source = Plan Summary step)
Plus
Uncrystallised Fund Value (source = Plan Summary step)
Plus
Top-up Amount (source = Recommended Contribution step)
Plus
Transfer-in Amount (source = Recommended Contribution step)
Plus
Either (if there is a revised gross monthly contribution)
Revised Gross Monthly Personal Contribution * 12 (source = Recommended Contribution step)
Or (if there isn’t a revised gross monthly contribution)
Gross Monthly Contribution * 12 (source = Plan Summary step)
Minus
Tax-Free Lump Sum (source = Recommended Withdrawal step)
Minus
Taxable Lump Sum (source = Recommended Withdrawal step)
Minus
Either (if there is a revised annualised income)
Revised Annualised Income (source = Recommended Withdrawal step)
Or (if there isn’t a revised annualised income)
Annualised Income (source = Plan Summary step)
Minus
Total Initial One-off Charge (source = Revised Plan Charges step)
All multiplied by
Total Annual Recurring Charge % (source = Revised Plan Charges step)
New Investment Recommendation
Initial
Lump Sum Investment (source = Plan Summary step)
Plus
Transfer-in Amount (source = Plan Summary step)
Plus
Monthly Contribution * 12 (source = Plan Summary step)
Multiplied by
Total Initial One-off Charge % (source = Plan Charges step)
Recurring
Lump Sum Investment (source = Plan Summary step)
Plus
Transfer-in Amount (source = Plan Summary step)
Plus
Monthly Contribution * 12 (source = Plan Summary step)
Minus
Initial One-Off charge % (source = Plan Charges step)
Multiplied by
Total Annual Recurring Charge % (source = Plan Charges step)
Note - Regular income / withdrawals are not included in the calculations, as Genovo assumes that immediate income is unlikely to be recommended (i.e. we would expect income to commence after 12 months).
New Pension Recommendation
Initial
Transfer-in Amount (source = Plan Summary step)
Plus
Gross Single Personal Contribution (source = Plan Summary step)
Plus
Gross Single Employer Contribution (source = Plan Summary step)
Multiplied by
Total Initial One-off Charge % (source = Plan Charges step)
Recurring
Transfer-in Amount (source = Plan Summary step)
Plus
Gross Single Personal Contribution (source = Plan Summary step)
Plus
Gross Single Employer Contribution (source = Plan Summary step)
Plus
Gross Monthly Personal Contribution *12 (source = Plan Summary step)
Plus
Gross Monthly Employer Contribution *12 (source = Plan Summary step)
Minus
Initial One-Off charge % (source = Plan Charges step)
Multiplied by
Total Annual Recurring Charge % (source = Plan Charges step)
Drawing Benefits from Your Pension Fund
Initial
Fund Value (source = Plan Summary step)
Minus
Tax-Free Lump Sum (source = Plan Summary step)
Minus
Taxable Lump Sum (source = Plan Summary step)
Multiplied by
Total Initial One-off Charge % (source = Plan Charges step)
Recurring
Fund Value (source = Plan Summary step)
Minus
Tax-Free Lump Sum (source = Plan Summary step)
Minus
Taxable Lump Sum (source = Plan Summary step)
Minus
Annualised Income (source = Plan Summary step)
Minus
Initial One-Off charge % (source = Plan Charges step)
Multiplied by
Total Initial One-off Charge % (source = Plan Charges step)