What do I do with investment management or administration fees?

Your investment management company or platform may charge you an aggregate total for combined investment funds and fees.

The fees need to be accounted for as expenditure while any other amount needs to be recorded as an investment.

For example, £505 may be paid out from your current account, with £500 being the investment and £5 being a financial or administrative fee. In this situation, £5 needs to be separately accounted for and recorded as an expense.

Two options to account for fees separately:

Option1:

You can manually delete the unmatched single transaction of £505 from your bank statement and replace it with two separate transactions of £500 and £5. Then:

• Reconcile the £500 as 'Money moved to Investment'
• Reconcile the £5 as a 'Direct Debit' to a financial fees category.

Option 2 (recommend):

We recommend you set up an additional 'bank' account in ExpensePlus called 'Investment control account' (or something similar). This will represent the investment company's bank account where the money goes across to get split.

In effect, it is a holding ground. This may also be needed when investments are being actively managed by a third party or platform.

Money is removed from one investment account, but instead of being returned to your current account, it gets moved/split into other investments (within the company or platform), so never returns to your own bank account. 

In the example outlined above, the outgoing amount of £505 from your current account is reconciled as a bank to bank transfer to the investment control bank account. To enable this to happen you would need to manually upload the following statement transactions to this 'dummy' Investment Control account:

• The top £505.00 transaction is the 'bank to bank transfer';
• The middle £500.00 transaction is 'Money moved to Investment';
• The lower £5.00 transaction is a Direct Debit expense allocated to a fees category.

This process can be completed in reverse for the scenario (mentioned above) where money is returned from one investment and then reinvested in a different product, with fees attached.

To help you better understand the Investments module as a whole, please visit the module overview page here.