I would like to know how to enter Advisor Fees into Quicken so that they reduce my performance (% pr

Unknown

Advisor Fees

markus1957

There are few ways but commission is not one of them because it will impact cost basis.

I manually created a security called "[zAccount] Advisory Fee", where [zAccount] is the name of financial institution, to capture the impact of fees on investment return. Fees are charged quarterly so on each date a fee is recorded, I manually enter two additional transactions; an Add Shares for 1 share of zAccount Advisory Fee at a cost equal to the fee charged; then a Sell of that same share for Zero dollars. I also go into the price history for the "fee" security and zero it out for all dates so it never records any net asset value.  The IRR then matches the after fee return.

If using the suggested workaround, note that in Tax Planner an amount equal to the sum of all fees YTD should be added to the short-term capital gains section as an adjustment to offset the fake STG loss used to mimic the affect of the fee on investment returns.  When setting up the Advisory Fee securities for each FI, I also created and applied a Security Type of "Inv Mgmt Fee" so that they can easily be excluded from Investment Reports such as Capital Gains by using the Customize option for Security Type. 

q_lurker

I go two separate ways:
1)  export the Investment performance report to Excel and calculate separately there omitting the fees from the return (XIRR function), or
2)  Subtract the "fee percentage" from the return Quicken calculates for a more approximate figure.    

Unknown

I like both ideas.  Will see which is easier and use. Thanks!

Jeffrey Wilens

Both of these are not acceptable solutions.  Quicken needs to fix this.

q_lurker

Jeffrey Wilens said:

Both of these are not acceptable solutions.  Quicken needs to fix this.

Since Quicken, Inc.'s definition of "fix this" may not match my definition, or your definition, it would certainly be helpful to the process to have more clarity from you.

My experience with non-specific fix it requests is that they rarely come out as expected. (Example: loan downloads)

Jeffrey Wilens

Jeffrey Wilens said:

Both of these are not acceptable solutions.  Quicken needs to fix this.

Fix this means that when calculating investment return, management fees are not included in the return.  That way I can easily compare brokers A & B without having to manually back out the management fees from the IRR.  Management fees have category Inv Exp.  The formula calculating IRR should exclude Inv Exp items.

q_lurker

Jeffrey Wilens said:

Both of these are not acceptable solutions.  Quicken needs to fix this.

"Management fees have category Inv Exp.." Or maybe Investment Exp, or Inv Expenses, or Invest Fees, or ... Are you suggesting it should be mandatory category always omitted? Or perhaps one user specified category, or perhaps any number of user specified categories?


Specifically, I use (rightly or wrongly) Inv Exp category for other fees, like ADR fees, that I want transferred to the right Shedule A line. Generally, I would not be thinking of omitting those when I look for performance after management fees.


I am not trying to be argumentative, but rather just trying to relate that what sounds easy on first take may impact other users in unintended fashions.


One direction I tossed out at one time was to include withdraw transactions as returns, but exclude MiscExp transactions. Ostensibly, that would give the user a way to accomplish the omission, when desired. I am not convinced that is a valid, better, or worse approach.

Jeffrey Wilens

Jeffrey Wilens said:

Both of these are not acceptable solutions.  Quicken needs to fix this.

If ADR fees are deducted from your account by the broker in the same manner that management fees are deducted, then I would think both should be excluded from the IRR.  I don't attempt to transfer Quicken to a tax program (I don't use Turbo Tax).  But I did (and may still) use Quicken to generate a Capital Gains report and then import that into my tax software for Schedule D.  But even that is not reliable because Quicken does not account for Wash Sales.  So I have to use the 1099s generated by the brokers anyway.

But to address your point, I don't see the issue.  Wouldn't all investment expenses including both management fees and ADR fees, be deducted on Schedule A?  If so, how would you be negatively impacted if all INV EXP were not included in calculating IRR.