As part of our commitment to complying with regulatory requirements and ensuring that our clients are well-informed about their investment choices, we have enhanced our interactive tools on Andes for the SEC Marketing Rule.

These tools will use the selected firm fee preference as the default. The following interactive tools have been enhanced to cater the SEC marketing rule:

1. Risk Tolerance Test

  • 10-Year Chart
  • Growth of $1


2. Model Management

  • Annual Returns chart

3. Portfolio Health Check

Fee Preference on the Interactive Tools

Here is how we show the fee preferences on all the interactive tools:

  1. Gross of Fee – No subtraction is made to the return since there are no fees included.

  2. Net of Fee – When calculating Net of Fee, the Advisory Fee will always be used in the context of the household. This means that the Advisory Fee for the household will be subtracted from the total return.

While the Investment Management Expense will always be used in the context of the model.

If no Advisory Fee on the household and no Investment Management Expense on the model, then use the Firm Advisory Fee + the Firm’s Investment Management Expense.

  1. Net of Max Fee –Refers to the total investment return after the maximum fee has been deducted. If the fee is not specified at the household level, the firm max fee will be used. The Maximum Fee will be subtracted from the total return.

Fees are all annualized, and for the 6-month period, the fee will be divided by 2 and subtracted from the gross. For the 1-year period, the fee will be subtracted from the gross.

You have the option to switch between fee preferences using the "Net/Gross of" dropdown menu on the Risk Tolerance Test and Portfolio Health Check. Please note that while you can make changes, you are not permitted to save them to conform with the firm's fee preference.


Annual Returns Chart on Model Management

On the Return & Drawdown tab, the Annual Returns chart reflects the selected fee preference. If "Net of Fee" is chosen, the model's investment management expense will be utilized instead of the firm default.



10-Year Chart & Growth of $1

The text has been included on the charts to reflect the selected fee preference. However, please note that this text will not appear on the IPS and Risk Tolerance Test reports.



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