IDEALX 0.99% p.a. management and the 15% performance-fee calculation. The terms below apply to the service you select and the account details supplied with it.
Definitions and interpretation #
| Term | Meaning |
|---|---|
| Platform | Idealx Platform Pty Ltd, ACN 694 912 126, ABN 83 694 912 126. “Idealx”, “we” and “us” refer to Platform for its services unless this document expressly identifies a different provider. |
| Client | the individual or legal entity identified as the account holder in the accepted application, including each trustee in its recorded capacity. “You” and “your” refer to that Client, except where this document expressly addresses an individual Console user or Firm. |
| Auto Pilot | the whole-eligible-account MDA service under the Auto Pilot Mandate. Only the legal account and assets identified in the Investment Program are included. |
| Investment Program | the personalised MDA investment program supplied with the required advice and accepted mandate, recording the Client’s objectives, permitted investments, numerical limits, risks, fees and review arrangements. |
| Net Managed Assets | the value of assets and cash within the managed scope less attributable investment liabilities, calculated consistently under the applicable valuation and fee rules. Unmanaged assets are excluded. |
| High-water Mark | the fee threshold protecting unrecovered investment losses, adjusted for capital flows and fee crystallisation under the Auto Pilot Fee Schedule. A market loss does not reset it. |
| Hard Hurdle | the minimum return threshold used solely to calculate performance fees. Only profits above the threshold and the high-water mark can qualify; it is not a promised return. |
| Crystallisation | the point at which an accrued performance fee becomes payable following the applicable calculation. An indicative accrual is not an additional fee. |
| GST | goods and services tax under Australian law. Consumer prices in the Fee Schedule include GST where applicable; a business price expressly stated as plus GST excludes it. |
| FX | foreign exchange: conversion between currencies. A valuation-only currency calculation is not itself an executed conversion. |
A specific meaning or rule in the relevant service clause prevails over a general definition. References to an accepted schedule or record mean the version supplied for that service, not an undisclosed internal policy. Mandatory legal rights and obligations are not displaced by these definitions.
Application #
This schedule sets the Auto Pilot fees for the managed assets identified in your Investment Program. It forms part of the MDA Client Agreement and Auto Pilot Mandate. The fee recipient, fee currency and collection account appear in your service confirmation; required personalised estimates and deduction consents are supplied before activation.
1. Management fee #
The fee is 0.99% per annum of daily net managed assets including managed cash, after investment liabilities but before that day’s management accrual. It excludes unmanaged assets and is not calculated on leveraged gross exposure. Use the actual days in each calendar year. Accrue daily and deduct monthly in arrears. No minimum fee or dollar cap applies. Rates include GST where applicable. If net managed assets are negative, the management-fee base is zero.
The 0.99% is the total Idealx Auto Pilot management rate. The ordinary 0.20% client-approved strategy fee is not added on the same assets. Accrual stops when management ends under the Auto Pilot Mandate; a provider-caused transfer delay does not extend it.
2. Performance fee and annual hurdle #
The performance fee is 15% of qualifying net investment profits above the higher of the adjusted high-water mark and the applicable 5% annual hard-hurdle threshold. It is not 15% of every positive return. There is no catch-up on the first 5% and no dollar cap.
The 5% hurdle is a fee threshold, not a forecast, benchmark promise or minimum return. Each account’s calculation year runs from activation anniversary to anniversary. For a first or shortened period, the time-proportionate hurdle in section 5 applies. Annual hurdle shortfalls do not accumulate, but the high-water mark preserves unrecovered losses.
3. Net performance and valuation #
Total portfolio return is measured after management fees and other charges attributable to the portfolio, but before the performance fee and the Client’s personal tax. Recognised income, distributions and realised and unrealised value changes are included consistently. Deposits are not profit and withdrawals are not loss. Income retained by a provider and not attributable to the Client is excluded from Client performance.
The administrator uses consistent, reliable asset and currency valuations. Performance-fee accruals are estimates until crystallisation and are reversed when no longer earned. Crystallisation is suspended for unverifiable values; established overcharges are corrected and refunded. A charge already reflected in an investment’s net value is not deducted again.
4. High-water mark #
Each capital lot’s opening high-water mark equals its initial net capital. At each crystallisation, including an anniversary when no performance fee is payable, the mark becomes the higher of its existing adjusted mark and its post-fee value. Market losses, a change of holdings or personnel and the start of a new year do not lower it. Cash-flow adjustments follow section 5.
Cash-flow adjustments preserve the loss history attributable to remaining capital. Amounts still below their adjusted high-water mark cannot incur a performance fee. Switching Auto Pilot off and back on is not used to erase an existing client’s loss recovery protection on continuing capital.
5. Contributions, withdrawals and calculation records #
Each contribution is tracked as a separate capital lot. Its opening value and high-water mark equal its net contribution, and it receives no charge for earlier gains. Subsequent gains, losses, income and portfolio charges are allocated proportionately using the lot’s share of portfolio net value at each cash-flow event, excluding deposits and withdrawals from investment performance.
For each calculation period, the hurdle base is the lot’s net value at the start of the period or, for a new lot, its contribution. Its hurdle threshold is that base plus 5% per annum prorated for the days the lot was managed. The day fraction is the sum of days in each calendar year divided by 365 or 366 for that year. The threshold does not compound within the calculation period. The lot’s high-water mark continues through losses.
At crystallisation, the fee for each lot is 15% of the positive excess, if any, of its pre-performance-fee net value over the higher of its adjusted high-water mark and hurdle threshold. Lots with no positive excess incur no fee. After deduction, the high-water mark is the higher of its previous adjusted mark and the lot’s post-fee value. A new annual hurdle period begins for continuing capital; hurdle shortfalls do not carry forward.
Partial withdrawals are allocated proportionately across the account’s lots. The exiting proportion of each lot crystallises using its proportionate current value, hurdle threshold and high-water mark. The remaining portions retain their corresponding loss and hurdle history. Cash distributions retained in the managed portfolio remain income; distributions paid out are treated as proportionate withdrawals after recognising that income once.
Calculations retain precision through daily accrual and lot allocation. Amounts deducted are rounded once, half-up to the fee currency’s minor unit at collection. The administrator provides the calculation basis on request and corrects errors. A change of holdings or management personnel does not reset thresholds; re-entry of continuing capital preserves its attributable unrecovered-loss history.
6. Crystallisation and collection #
Crystallise on the activation anniversary and on the relevant withdrawn or terminated portion. Ending management alone does not create a fee if thresholds are not met. Accrued performance fees must be reflected in client reporting so a later debit is not presented as an unexpected loss.
Deduct from the identified managed cash account under valid authority. Any sale to meet fees must be allowed by the mandate and implemented reasonably. Fee collection must not create unapproved borrowing, use another legal account or seize unrelated self-directed assets.
7. Worked examples — no intervening flows #
Assume starting capital and high-water mark of $100,000, a full year and no deposits or withdrawals. All ending values below are AFTER the management fee and other portfolio costs but BEFORE performance fees; the examples do not calculate those other charges.
Ending value $112,000: hurdle threshold $105,000; eligible excess $7,000; performance fee $1,050; ending value after performance fee $110,950. New high-water mark $110,950.
Ending value $104,000: below the $105,000 hurdle, so no performance fee. Ending value $90,000: no performance fee and the $100,000 high-water mark remains.
Following a loss to $90,000, a later full-year recovery to $99,000 still produces no performance fee despite exceeding that year’s $94,500 hurdle: the $100,000 high-water mark has not been recovered. A recovery to $102,000 would produce a fee only on $2,000 in this simplified example.
Management fee illustration: if the daily fee base were $100,000 throughout a full year, the management fee would be $990. Actual fees vary with daily values. The examples exclude personal tax and are not return forecasts.
8. Other costs and double charging #
The cost summary supplied before activation identifies brokerage, FX, fund expenses, custody and adviser charges payable by the Client where applicable. This schedule does not create unspecified charges or replace their agreed basis. Expenses embedded in an underlying investment’s value are included in required total-cost disclosure without being deducted twice.
Waive or credit overlapping Idealx management and performance fees when Auto Pilot uses an underlying Idealx-managed strategy. Separate independently contracted advice fees require valid disclosure and authority. Cash-interest retention, if lawfully implemented, must be disclosed separately rather than described as cost-free cash management.
9. Fee authority and changes #
The acceptance screen displays the rates, calculation method, cost summary, recipient, collection account and payment timing. Obtain any prescribed separate written ongoing-advice fee consent, including required dollar amounts or reasonable estimates and renewal details. Withdrawal of such consent is handled under applicable law; a general MDA checkbox cannot keep it alive indefinitely.
No fee increase applies retrospectively. Material changes require appropriate advance disclosure and acceptance. Platform may offer disclosed discounts, waivers or negotiated rates, recorded in the Client’s fee schedule. Individual managed strategies have their own rates; this schedule does not set them.