A number of advisers have contacted us recently regarding the Additional Expenses and Total Expense Ratios (TERs) that are incurred on our range of external funds.
Additional expenses are costs incurred through the administration and management of the underlying assets of a fund. These costs can include bank charges, trustees', registrars', auditors' and regulators' fees and safe custody charges.
External fund managers may charge an additional expense to cover these costs. Where this charge is applied, it is taken directly from the external fund and is included in the unit price. This charge is the additional expense for the fund.
We would like to stress these additional expenses are not charged by Standard Life Assurance Limited. They are expenses taken out of the fund by the Fund Manager. Also, the additional expenses would be the same whether you invested in the fund directly, or through a Standard Life platform.
Additional expenses aren't fixed and vary over time. Standard Life will update the additional expenses on our literature and quotes every six months, although the Fund Manager may change the additional expenses more frequently. This is why you may see a difference in the additional expenses between a Standard Life quote and a fund fact sheet
The Total Expense Ratio (TER) of a fund is simply the percentage of a fund's assets consumed by all annual charges.
A TER is not normally stated on quotes and literature. To calculate the TER for a fund, simply add the AMC and the additional expenses figures together.
| Fund: ABC Fund | 1.50% AMC |
| + 0.05% Additional Expenses | |
| = 1.55% TER |
The Additional Expenses for our funds can be found in the product specific documents available through this link - Fund Information.
If you need copies of these documents, or have any further questions regarding additional expenses or charges, please contact your Standard Life office.
No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of this content.
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