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Set Up Payout Distributions

Contents

Introduction

Where to Set Up Payout Distributions: Accounts or Users

Set Up Payout Distributions at the Account Level

See Account-Level Payout Distributions in Action

Set Up Payout Distributions at the User Level

See User-Level Payout Distributions in Action

What Happens When You Use Both Account-Level and User-Level Payout Distributions

See Account- and User-Level Permissions Used at the Same Time

 

Introduction

Payout distributions allow you to set what percentage of the revenue from a billed account is attributed each payee. Then, when an account is billed, the billed amount is split among all the payees according to the designated payout distributions. Those distributions are aggregated and displayed in the Firm Revenue report.

Before you run the Firm Revenue report, you will need to set up payout distributions for all accounts, designating which payees should receive the revenue.

This page discusses why you would set up distributions at each level and the repercussions of doing so.

The Revenue Calculation

The Firm Revenue report calculates revenue based on billed amount, not on amount paid or reconciled.

Where to Set Up Payout Distributions: Accounts or Users

Payout distributions can be set up on either at the account level and, optionally, at the user level. In general, your firm will do one or the other, rather than both. Which one you choose depends on how your firm allocates payments.

Designate Payout Distributions at the Account Level

Use if: Your firm tends to allocate revenue to the firm first, then pay out to advisors or others.

Example: A large firm pays advisors a percentage of the revenue generated on accounts managed. The firm is paid first, but the exact percentage split varies by advisor. Some advisors are split the billed amount with the firm and the custodian; other advisors split their management fee with another advisor, the firm, and the custodian.

Designate Payout Distributions at the User Level

Use if: Your firm tends to allocate revenue to advisors first, with a smaller portion set aside for the firm and others.

Example: A firm has two advisors. The advisors evenly split all revenue, each receiving 48% from all accounts billed. The remaining 4% is reserved for firm expenses.

Set Up Payout Distributions at the Account Level

To set up account-level distributions:

  1. In User Management, select the Available for Payout Distribution check box, but don't edit the default payout percentages. For more information about user-level payout distributions settings, see Manage Permissions for Billing.

  2. Assign the desired split at the account level. For more information about setting account-level payout distributions, see Maintaining Accounts: The Billing Settings Panel.

See Account-Level Payout Distributions in Action

For payout distributions set up at the account level, when accounts are billed, the billed amount is distributed as illustrated in the example below:

Set Up Payout Distributions at the User Level

To set up user-level distributions:

  1. In the account's payout distribution settings, add the advisor as a User payee and set the payout distribution percentage to 100%. For more information about setting account-level payout distributions, see Maintaining Accounts: The Billing Settings Panel.

  2. Assign the desired split on the user level. For more information about setting user-level payout distributions, see Manage Permissions for Billing.

See User-Level Payout Distributions in Action

For payout distributions set up at the user level, when accounts are billed, the billed amount is distributed as illustrated in the example below:

What Happens When You Use Both Account-Level and User-Level Payout Distributions

It is not recommended to use payout distributions at both levels. However, if you do use payout distributions at both the account and user levels, the account billed amount will be distributed first according to the account level distributions, and then according to the user level distributions.

See Account- and User-Level Permissions Used at the Same Time

When you set up payout distributions at the account level and user level, when accounts are billed, the billed amount is distributed as illustrated in the example below: