The terms and conditions I initially agreed to did not include the account fee or the AUM fee. Are you allowed to add an account fee and apply an AUM fee to existing investments?
Our existing investment terms and conditions permit the introduction of both the AUM fee on each property investment SPV and the account fee on all active accounts. An active account has had funds deposited in to it.
Why have you introduced an AUM fee and an account fee?
As a company, we have to make the business more durable in order to drive returns for our clients.
Until now, our revenue has been sourced almost entirely from upfront fees on New Listings, so we need to re-balance our fee structure to reflect the relative scale of the property portfolio and to provide a more reliable recurring source of revenue. This ensures we are well placed to manage the property portfolio in order to maximise long term value for our clients.
We are devoted to continuing to offer all clients the ability to invest as much or as little as they choose, but we need to account for the fact that there is a minimum "cost to serve all clients. That is the reason we have introduced an account fee.
How can I avoid accepting the new terms and conditions?
In order to avoid accepting the new terms and conditions you would need to stop using the platform before 5 August 2019. In practice, this would mean selling all the property shares you own before 5 August, so as not to be charged the AUM fee, and withdrawing all funds from your account to avoid being charged the account fee.
However, if, before 5 February 2020, you sell any shares held on or before 15 July 2019, you will automatically receive a rebate of any AUM fee paid on those sold shares.
What happens if I don’t have enough money in my account to pay the account fee?
In the event that your account has insufficient funds available to pay the account fee, the account fee shall accrue on a monthly basis and be deducted once you have available funds in your account.
How do I exit my investment?
You can exit property investments by selling shares on the Resale Market at any time, or via the 5 year exit mechanic. Learn more about selling shares on the Resale Market and the 5 year exit mechanic here.
Please note, we cannot sell shares on behalf of clients. There is no fee to sell shares on the Resale Market.
How do I close my account?
You can only close your account if you do not hold any investments. If this is the case and you would like to close your account please contact us at email@example.com and we will close your account for you.
How do the recurring fees impact the performance of my investments?
The AUM fee will reduce the net dividend yield earned on a property by 1.2 percentage points p.a. For example, if a property is currently paying a dividend yield of 6.0% p.a., the net dividend yield received by shareholders will be 4.8% p.a. after the AUM fee has been deducted.
Clients with portfolio holdings valued above £25,000 will receive a cash rebate to reduce the impact of the AUM fee to 0.7 percentage points p.a. on this part of their portfolio.
Property is a total net return asset class meaning your return is a combination of dividends and capital gain. The AUM fee only impacts income returns and does not impact the value of the underlying properties.
The account fee is deducted from cash in your account which can come from dividends, the sale of investments or deposits. The account fee does not impact the performance of any specific investment but will reduce the net cash return across a client’s account by £1.20 per month (£1.00 fee + £0.20 VAT).