Can I run an Investment Performance Report that takes into account advisor fees?

ozzy032

I'm using Quicken 2017 Home and Business. Is there a report I can run that will calculate an investment account's IRR after advisor fees are taken into account? At the moment, the calculated IRR doesn't take into account the fact that I've paid advisor fees. Its showing the fees as if they were cash withdrawn from the account, not paid to the advisor. If I invest $100k, the account earns $10k, and then I pay $10k in advisor fees, my actual IRR is 0%. Quicken seems to want to say that I withdrew that $10k, and my return is $10k, or 10%. I don't get to keep the advisor fees. When running an Investment Performance Report, Quicken places these fees in the Returns column and adds them to the ending market value of the account as if I withdrew the money and pocketed it. The Customize Report settings don't seem to give me an option of turning these on or off. Any suggestions?

Sherlock

If you haven't already, you may want to review: https://getsatisfaction.com/quickencommunity/topics/irr-handling-account-fees

ozzy032

Thanks for the link. I hadn't found that specific thread, but did previously see another thread from two years ago that had the same answers from markus1957. Sounds like no improvements have been made in the last two years, and that Quicken has not fixed this issue. The suggested work arounds are not acceptable solutions in my opinion. A slightly easier (for me) work-around is categorizing the Advisor Fees as a Margin Interest Expense. Margin Interest Expense transactions are not counted as returns the same way withdrawals or misc expense transactions are by Quicken. They are not included when calculating IRR. This works for me because I have no other Interest Expenses in these accounts, so I know that all Margin Interest is actually an Advisor Fee. Still a work-around though. This is not a preferred solution, and it would be nice if Quicken would fix this and give users the option of including fees or not in the IRR reports.

markus1957

@Jim_Harman said:

Investigating this further, it appears that this capability is already (somewhat) available in Quicken. If you record the management fees as MiscExp's and leave the security name blank. the fee is treated as a withdrawal as discussed above.

However, if you assign a security name in the MiscExp transaction and run the report on just that security, the fee appears in the Investment column of the Investment Performance Report, thus reducing the IRR of that security. 

At the account level, the fee is now excluded from the report, resulting in the reduced overall performance for the account.

Adding- It Works!!!!!!!!!!!!!!!!!!!!!!!!!!
No extra steps other than creating a dummy "zInvestment Fees" security with zero shares and a price of zero. The "z" makes it easy to find in the pull-down when editing the downloaded transaction to make it a MiscExp.  I had also created an "Inv Mgmt Fee" Investment Type to allow easier report customization but I'm not sure I would need to do that now.