Broker recommending third party money manager

Unknown

I have an account with JP Morgan and they recommended putting a chunk of money with a third party investment manager.   The third part invests in hundreds of stocks bonds, etc.  I am trying to figure out the best way to track performance on this strategy.   

Investment manager does not provide transaction downloads, and dont really want to load hundreds of small shares to quicken- so is the best solution to just do monthly adjustment transactions in quicken (just from the monthly statements)?

just looking for suggestions, thanks.

PS. actually nice bing here looking for something positive rather than fighting technical issues...

Unknown

I think Quicken has something called 401(k) update wizard that does what you want.  Quoting from the help file: "

• Use the 401(k) Update wizard whenever you receive a statement from your
  401(k) financial institution (typically once per quarter). You don't need to
  update your Quicken 401(k) account every time you make a contribution from your
  paycheck. Update only when you receive a new statement from the 401(k) plan
  provider.

Alternatively, why not just put your money with Vanguard or Fidelity and buy a broad based index or do a 60/40 split between S&P 500 and a bond fund.  Its so much simpler and cheaper and automatic downloads work.

Jim_Harman

If you are not making periodic investments in that part of the account, and say you have 32,000 invested, you could create a security "Managed account" or whatever and tell quicken you are buying 1000 shares st 32. Then each month adjust the share price to match the current value of the account. If it pays dividends to you, record them like any other dividend.



If it is a taxable account, this will not track capital gains.



If you add money to the account later, this gets more complicated because you will no longer have a round number of shares

NotACPA

Jim Harman said:

If you are not making periodic investments in that part of the account, and say you have 32,000 invested, you could create a security "Managed account" or whatever and tell quicken you are buying 1000 shares st 32. Then each month adjust the share price to match the current value of the account. If it pays dividends to you, record them like any other dividend.



If it is a taxable account, this will not track capital gains.



If you add money to the account later, this gets more complicated because you will no longer have a round number of shares

I'd be inclined, using Jim's example, to buy 32,000 shares at $1. 
 
That's how I manage one of my wife's retirement accounts that doesn't provide security info or share price.  They just provide a total account value. 
 
BUT, note, that because this is a retirement account, there's no tax consequences for activity in the account.

q_lurker

just looking for suggestions, thanks.

For me the challenge of these types of setups in Quicken has always been the unrealized changes in value.  

I think I would look at it as an investment account holding cash.  Monthly, I would record various income and expense transactions to applicable categories.  While you could probably use existing categories (_DivInc, _IntIncTaxFree, etc.) I would explore the value of separate independent categories (IMDiv, IMInt, IMShtTrmGain, IMFees) just to not risk messing up Quicken's internals.

Now for the unrealized change in value, an IMUnrealizedGain category would be needed to cover both gains and losses. 

So each month you would record a series of transactions (maybe 3 to 10) that would summarize that month's real-world changes both as real change in value and also as the on-paper unrealized change in value.  The net of all those transactions would yield the new account balance, 

For me that approach would be more meaningful than a single 'adjust share balance' or 'adjust cash balance' type of transaction.  I'd have a better feel for the types of income and expenses that had occurred.  I would hope that as an investment account, I might also be able to get meaningful performance measure for the account as a whole.   

I have not pursued that approach for my personal files so I cannot testify as to its total suitability.         

mshiggins

I prefer having the actual transactions even it is more effort.



I have some investment accounts that don't offer downloads and some accounts that offer downloads that I don't find of sufficient quality. I've used different strategies to generate the transactions - Reminders, Memorized Investment Transactions combined with Scheduled Transaction Groups, and QIF imports.

Rocket J Squirrel

IMHO, a managed account is not in your best interest. I had one years ago, and it did download fine to Q. But the constant trading & associated commissions resulted in my Q file overwhelmed with transactions and worse, me losing money. Not to mention the tax liability of frequent short-term sales. Those managers are out for themselves unless you can find one that acts as your fiduciary. In my personal experience, managed accounts were big fat losers. My total returns are consistently higher when I self-manage my holdings.

Jim_Harman

Jim Harman said:

If you are not making periodic investments in that part of the account, and say you have 32,000 invested, you could create a security "Managed account" or whatever and tell quicken you are buying 1000 shares st 32. Then each month adjust the share price to match the current value of the account. If it pays dividends to you, record them like any other dividend.



If it is a taxable account, this will not track capital gains.



If you add money to the account later, this gets more complicated because you will no longer have a round number of shares

Starting with 32,000@1, what do you do next month when the account is worth 32,109? Change the share price to $1.0034? Add 109 shares @ 1?

I just enter a new share price of $32.109 and
Quicken's performance calculations are correct. Again, this approach works best if you are not adding money to the account and don't care about capital gains tracking for this account in Quicken.