PROBLEM MANAGING FIDELITY ACCOUNT REINVESTMENT TRANSACTIONS

JMSOUNDER

Fidelity account has a cash link. When I download reinvestment data, the cash amounts go to the cash linked acc with the proper description, div; cg etc but not share data. These transactions are added to the fidelity fund acc with description and amt but no shares. The total cash for all tranactions , div, stcg, ltcg are transferred and recorded as bought with a total share balance and share unit price. But I also have tranactions that show reinvested div and cgs.

The investment activity report adds the "Bought" val to the mkt val 1 which becomes the amount invested for the time interval. The income section shows the sum of bought and reinvested cash. Both quicken actions are correct. However, there should not be a bought transaction, only reinvestments.

My problem how do I correct the fidelity tranactions to show that both are reinvestments. Is there a workaround to edit this data or do I have to manually edit? What do I need to change to fix future transaction downloads.?

I could not find anything on support or community about this problem.

[Edited from UPPER to sentence case using https://convertcase.net/ - RJS]

JMSOUNDER

THANKS TO ALL THREE CONTRIBUTORS FOR THEIR SUGGESTIONS. THE SCREENSHOT IS VERY USEFUL. I hesitated to respond because I wanted to get my information in order.

I reached out to the community because my Fidelity Accounts did not make sense and I wanted to see if others were having the same problem. NotACPA indicated that his experience is similar. I went back many years 10 to 20 and the Fidelity data is the same, therefore I concluded that nothing was wrong with my files per se. (I did find some problems and there may still be more)

It does not seem to matter whether you have a cash linked account, you get the same information in the investment reports.

Fidelity reports reinvestment of dividends and capital gains as separate transactions and a "buy" transaction for all monies and a single share amount in their statements and the same format is downloaded into Quicken. This creates problems when you run investment reports to evaluate investment activity, transactions or performance reports. I think it would be better if Quicken changed the interface subroutine that accepts Fidelity data to calculate each component of the reinvestments and recorded them in Quicken as reinvested dividends, reinvested gains, etc. just the way the data from other brokerage firms are recorded. It produces much cleaner reports that are less confusing. The "buy" transaction is creating a lot of problems and may be contributing to incorrect investment analysis. I do know that I have a lot of other concerns about the investment report terminology and the associated analyses that need to be addressed.

I looked at investment data from six different brokerage accounts in Quicken and the Fidelity account is the only one of mine that records reinvestment income as a "buy".

Quicken Francisco

Hello @JMSOUNDER

Thank you for reaching out on the community and telling us about your issue. I do apologize for the issue you're having. That is an odd issue. I'm wondering ere if you could show us currently how they're displayed. This will give us a better idea of how to try correcting the register to reflect accurately. I'll leave an article down below on how to take a screenshot. 

https://community.quicken.com/discussion/7867159/faq-how-do-i-post-a-screenshot-in-the-community-from-windows#latest

Once you've had a chance to do so let us know how and we'll see what we can do.

Thanks,

Quicken Francisco

Sherlock

If you would like to change a Div (or DivX) and Bought (or BoughtX) action transactions into a ReinvDiv action transaction, you must manually edit the transactions in the account.  The financial institution controls the form of the future transaction downloads.

There has been quite a bit of discussion about the fact that reinvestment transactions are treated differently in performance metrics when their split into separate income and purchase transactions .  If you're tracking investment performance, I suggest being consistent.  

NotACPA

I'm a Fidelity customer also.  My experience has been that if a Fidelity fund is making a SINGLE payment, on a given day, then it will  download  as ReinvDiv, ReinvInc, etc.  This is because I have set, at Fidelity's website, to reinvest all such distributions.  I received a single such transaction just this morning for Equity Income fund, which paid a dividend.

IF,  however, multiple payments are made for the same  fund on the same day (say, a DIV, a CGShort and a  CG Long), Fidelity will download each of those individually and then download a single BOUGHT transaction that covers all of the cash received.

JMSOUNDER

THANKS TO ALL THREE CONTRIBUTORS FOR THEIR SUGGESTIONS. THE SCREENSHOT IS VERY USEFUL. I hesitated to respond because I wanted to get my information in order.

I reached out to the community because my Fidelity Accounts did not make sense and I wanted to see if others were having the same problem. NotACPA indicated that his experience is similar. I went back many years 10 to 20 and the Fidelity data is the same, therefore I concluded that nothing was wrong with my files per se. (I did find some problems and there may still be more)

It does not seem to matter whether you have a cash linked account, you get the same information in the investment reports.

Fidelity reports reinvestment of dividends and capital gains as separate transactions and a "buy" transaction for all monies and a single share amount in their statements and the same format is downloaded into Quicken. This creates problems when you run investment reports to evaluate investment activity, transactions or performance reports. I think it would be better if Quicken changed the interface subroutine that accepts Fidelity data to calculate each component of the reinvestments and recorded them in Quicken as reinvested dividends, reinvested gains, etc. just the way the data from other brokerage firms are recorded. It produces much cleaner reports that are less confusing. The "buy" transaction is creating a lot of problems and may be contributing to incorrect investment analysis. I do know that I have a lot of other concerns about the investment report terminology and the associated analyses that need to be addressed.

I looked at investment data from six different brokerage accounts in Quicken and the Fidelity account is the only one of mine that records reinvestment income as a "buy".

Jim_Harman

What investment analysis are you looking at that appears to be incorrect?

If the distribution(s) and the Buy are on the same day, the Investment Performance Report will compute the same IRR result as if the transaction was entered as one or more Reinvests.

NotACPA

"I looked at investment data from six different brokerage accounts in Quicken and the Fidelity account is the only one of mine that records reinvestment income as a "buy". "

Complain to Fidelity, but I doubt that it will do much good. 

Quicken can't control this and SHOULDN'T muck around with what the Financial Institution sends.

You are free, if you want to invest the labor, to delete those Div, CGShort, etc transactions and edit the BUY to be a REINVDiv that covers everything.

Rocket J Squirrel

NotACPA said:

My experience has been that if a Fidelity fund is making a SINGLE payment, on a given day, then it will  download  as ReinvDiv, ReinvInc, etc.

IF,  however, multiple payments are made for the same  fund on the same day (say, a DIV, a CGShort and a  CG Long), Fidelity will download each of those individually and then download a single BOUGHT transaction that covers all of the cash received.

Correct. This describes Fido's behavior exactly.

NotACPA said:

Complain to Fidelity, but I doubt that it will do much good. 

You are free, if you want to invest the labor, to delete those Div, CGShort, etc transactions and edit the BUY to be a REINVDiv that covers everything.

I have complained to Fido many times over the years without success. I give up.

I do the opposite of what @NotACPA describes above. I delete the Buy and change the Divs & CGs to be Reinvs. I don't think you want a big ReinvDiv that includes reinvestment of capital gains as well as dividends.

JMSOUNDER

I want to focus on the Fidelity issue. Jim, I will post my concerns on investment reports later.

My points are the following:
1. Fidelity has been using this format for many years, both in their reports and data provided to Quicken. They are not going to change.
2. I do not know how Quicken links to a financial institution, but I assume that the interfaces are all different and require some form of a subroutine for each institution to process the downloaded data to a Quicken usable form. This is where I suggested Quicken process the Fidelity data to make their data the same as other institutions and unclutter the report process.
3.The Fidelity “buy” transaction appears in the investment activity report and the performance report, for example. This may be my problem, I don’t know. The performance report seems to use two values; mv1 and mv2 to determine the %return rate for the period in question. However, it seems the buy transaction can be a part of that computation. I will detail this when I post my investment report comments.
4. It is too labor intensive to manually update my data and if the “buy” issue affects other reports than I have a major problem. The problem could be both mine and Quickens, I really do not know at this point.

Again, I would like to thank all who have contributed to this post!

JMSOUNDER

This is a summary of the Investment analysis of a single Fidelity Mutual Fund.
Fig 1 is the Investment Activity which shows deposits and reinvestments, blue check marks. The deposits result from the reinvestments added as a "buy" and having a cash linked account. The change in value of -84,666.27 results from including the reinvestments twice. This does not happen with Fidelity accounts when there is no linked account. The report makes the correct calculations. Further, there is no problem like this with linked cash accounts from other institutions.
Fig 2 is the investment report. The reinvestments(blue chk) are present in both the investment and return columns and the green chk are the sums. The difference in the sums does give the correct "return" value of 6732.13. But the correct return can be calculated without the reinvestment values in this report. It just confuses matters. The Amount invested 1-year is 199206,66 in the report but it should be the beginning value 182168.89. The average annual return is 4.01%(red chk) which I cannot figure how to calculate. All other reports follow the same calculation below;
Avg Ann Rtn = {[end val/beg vale] * (1/t)} - 1.0
= { [(124704.78 + 64196.24)/182168.89] * (365/366)} - 1.0
= 1.0369 - 1.0 = .0369
Figure 3. show how these calculations become part of my custom performance analysis report. The amount invested for 1-year is 199206.66 from total column of fig 2. This is wrong, it should be the beginning value, the reinvestments are part of the return.
ROI = Return/Amount Invested
= 6732.13/ 182168.89 = .0369
Therefore the ROI calculation is wrong for the Fidelity data. It is further complicated by the fact that Fidelity has mixed data: sometimes the data is downloaded as direct reinvestments and sometimes it is a four part series of transactions, dividends, capital gains and a buy transaction. Therefore you do not know what data is included or omitted in the analysis! The problem seems to be unique to the manner in which Fidelity reinvestment data is processed in Quicken.
A major feature of Quicken is the ability to process personal investment information, however, Fidelity data is producing incorrect analysis. This problem can only be corrected by changing the data processing in Quicken to record each reinvestment transaction. I am not going to manually fix 20 years of reinvestment data!! The bottom line for me is that my Fidelity evaluations are unreliable.

Rocket J Squirrel

JMSOUNDER said:

Fidelity data is producing incorrect analysis. This problem can only be corrected by changing the data processing in Quicken to record each reinvestment transaction.

Correct.

I am not going to manually fix 20 years of reinvestment data!!

That is your choice. (As Vito Corleone might say, "Why didn't you come to us before?")

Perhaps you'd be more willing to fix, say, 5 years of data and only run reports for that time period forward.

q_lurker

@JMSOUNDER
You are misinterpreting the information in the Quicken Investment Performance Report.  See below for the same calculation in Excel.  The variation 4.01% vs 4.04% is within my tolerance of accuracy.  The upper part of the Excel snip duplicates the values Quicken is using.  the lower portion omits the Net-$0 same date values and reaches the same value of 4.04%  

a)  When Investment and return columns cancel each other out on the same date, those values have no impact on the Average Annual Return (IRR) computation.

b)  The totals do not impact the computation.  They seem to be provided only for a broad reference.

c)  This is not a ROI calculation.  The IRR 'equation' can be found in the Help file for Average Annual Return.  The primary difference is that the timing is considered.  Indeed, changing the date for the SoldX transaction to be earlier increases the IRR value; to be later decreases the value.  That will not be so for an ROI calculation.    

  

I can't comment on the 'Fidelity' aspect.

Jim_Harman

Let's focus on your Fig. 2, the Investment Performance Report. This shows the Internal Rate of Return (IRR) of one of your securities. The IRR is essentially the compound annual rate of return a bank account would have had to match the performance of the security, given the same cash flows or Investments and Returns.

In your case, you started with $182,168.89

On 9/11 there were Returns from a dividend and a capital gain distribution totaling $11,513.45 that were used to purchase the same amount of the security, i.e reinvested.

On 10/6, you sold some shares for $64,196.24.

On 12/11 there were 2 more distributions totaling $5,524.32 that were also reinvested.

At the end of the year, your security was worth $124,704.28

For IRR purposes, the transactions on 9/11 and 12/11 do not affect the calculation because you essentially deposited and withdrew the same amounts on the same days. If these transactions had been entered as Reinvests, there would have been no cash flows on those days and your report would not have any entries for 9/11 or 12/11.  The reported performance would be exactly the same.

[ WRONG See below - Ignoring compounding effects and the change in market value before and after your sale, your performance was $124,704.28 / ($182,168.89 - 64,196.24)  - 1 or a gain of 5.7%.]

I am confident that if you entered these same cash flows and dates into Excel's XIRR function, which does the same calculation, it would produce the same result as the Quicken report shows.

Jim_Harman

And just to prove my point, here are the numbers from Excel


The discrepancy with @q_lurker's XIRR calculation above and mine is that to get a full year in Excel's calculation and match Quicken, you need to start the period one day earlier,  thus my starting date of 12/31/19