Data Issues from Transfer to New Brokerage - Quicken Invested Amount vs Cost Basis

nhicks87
nhicks87 Member ✭✭
edited August 2021 in Investing (Windows)
Hi all,

First post, bear with me.

I recently switched Brokerages and did an ACAT transfer to move my securities between the two. I've had two issues - both of which I can fix in isolation. However, I can't seem to create a view that accounts for both at once.

1. At first, the income associated with my securities disappeared. I was able to resolve this by including the previous brokerage account (rather than just the new one) in my Portfolio View. That way, the income produced while in the old account is represented. No problem so far.

2. Including the new accounts in #1 introduced a new problem. My "Amount Invested" is now roughly 2x higher than it should be. It's including amount invested from both old and new accounts despite that amount only being invested once.

For example, let's say I buy $100 worth of IBM in brokerage1 (amount invested = $100). Then I transfer those shares to brokerage2. Amount invested now shows $200 despite no additional funds/expenses being incurred for IBM.

So now I'm having to choose between the two issues. I either fix income and break amount invested or I fix amount invested and break income. Is it possible to accurately represent both at once in the same view?

For context, I am not including closed lots (doesn't help anyway) but am including both old and new accounts in the portfolio view.

Thanks for the help!
-Neale

Answers

  • nhicks87
    nhicks87 Member ✭✭
    I should also have noted that I did a security transfer transaction within Quicken to move them over (shares added/removed). These were not recorded a purchases/sales.

    I believe using purchase/sale would introduce all sorts of problems with cash balances, realized gains/losses, etc.
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited August 2021
    Quicken's definition of amount invested is not your definition.  I suggest you review: https://help.quicken.com/display/WIN/Tell+me+about+key+investment+performance+calculations+used+in+Quicken

    Note: When you transfer an account to a new account, you may want to consider continuing to use the original register.
  • nhicks87
    nhicks87 Member ✭✭
    Hi Sherlock,

    Thanks for the response. I do seem to be missing something (feel free to point it out) but I've reviewed their definition as well as a number of posts on the topic.

    They define it as "Amount invested is the actual dollar amount that you've invested in a security to date. Amount invested includes any expenses (such as commissions and fees) for that security. It does not include reinvested amounts, such as reinvested dividends, interest, or capital gains distributions."

    The day before my transfer (IBM in brokerage1), let's say the amount invested is $100 (maybe $90 in purchases and $10 commission fee). The day after the transfer (IBM in brokerage2), there have been no additional funds invested into IBM. No additional expenses. No transactions or changes at all to the investment.

    The amount invested into IBM is still $90 and the commission is still $10. Amount invested is still $100, no? It seems to me that the "actual amount invested in that security to date" did not change. The only thing that changed was which brokerage has custody of the assets (the name of the account they sit in). None of the data on the assets themselves is any different.

    Let me know if I'm missing something here.

    -Neale
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    edited August 2021
    nhicks87 said:
    Hi Sherlock,

    Thanks for the response. I do seem to be missing something (feel free to point it out) but I've reviewed their definition as well as a number of posts on the topic.

    They define it as "Amount invested is the actual dollar amount that you've invested in a security to date. Amount invested includes any expenses (such as commissions and fees) for that security. It does not include reinvested amounts, such as reinvested dividends, interest, or capital gains distributions."

    The day before my transfer (IBM in brokerage1), let's say the amount invested is $100 (maybe $90 in purchases and $10 commission fee). The day after the transfer (IBM in brokerage2), there have been no additional funds invested into IBM. No additional expenses. No transactions or changes at all to the investment.

    The amount invested into IBM is still $90 and the commission is still $10. Amount invested is still $100, no? It seems to me that the "actual amount invested in that security to date" did not change. The only thing that changed was which brokerage has custody of the assets (the name of the account they sit in). None of the data on the assets themselves is any different.

    Let me know if I'm missing something here.

    -Neale
    Quicken's definition of amount invested has the amount invested as $100 in IBM at brokerage 1 and, after the transfer, the amount invested as $100 in IBM at brokerage 2, for a total amount invested of $200 in IBM.

    Note: The cost basis of the IBM holdings is $100.
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    nhicks87 said:
    Hi Sherlock,

    Thanks for the response. I do seem to be missing something (feel free to point it out) but I've reviewed their definition as well as a number of posts on the topic.

    They define it as "Amount invested is the actual dollar amount that you've invested in a security to date. Amount invested includes any expenses (such as commissions and fees) for that security. It does not include reinvested amounts, such as reinvested dividends, interest, or capital gains distributions.

     … 

    Let me know if I'm missing something here.

    -Neale
    I think you’ve quoted accurately and have a good basic understanding. What you are missing is Quicken’s application. 
    In the Shares Transferred application (and several other related situations) Quicken generates Remove Shares and Add Shares transactions that truly represent the exact same real-world shares. But once those two transactions are generated and entered as records, the connectivity between them is lost. You can change anything on one side and the other side is not affected. Within Quicken, the two sides no longer commonly represent the same shares. The Add Shares side is then treated as separate and distinct from the shares removed. As such, for the Amount Invested parameter, Quicken sees that one time you bought shares got $100 and in a separate transaction you Added shares with a $100 basis. 
    This is an aspect of a common affliction for the Amount Invested parameter - that it does not adjust when shares are sold or removed. 
    HTH
  • Sherlock
    Sherlock SuperUser ✭✭✭✭✭
    q_lurker said:

    This is an aspect of a common affliction for the Amount Invested parameter - that it does not adjust when shares are sold or removed. 
    HTH
    Unless you sell all of the shares of the holding:


  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    Sherlock said:
    Unless you sell all of the shares of the holding:
    Yes, that is what they say. In my experience, even that is not 100% reliable. 
  • Chris_QPW
    Chris_QPW Member ✭✭✭✭
    q_lurker said:
    Sherlock said:
    Unless you sell all of the shares of the holding:
    Yes, that is what they say. In my experience, even that is not 100% reliable. 
    Yes if it was 100% then workarounds like this wouldn't be needed:
    https://community.quicken.com/discussion/7895416/cost-basis-issue-after-selling-all-shares

    I personally have one that there isn't any way to fix.


    There isn't any way to select a ESPP security so you can't use something like a return of capital transaction to offset the problem.
    Signature:
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  • nhicks87
    nhicks87 Member ✭✭
    Thanks for all the input.

    I'm going to look into workarounds like removing all of the shares from the old account (brokerage1) prior to transferring to the new account (brokerage2). I'm hoping this will cause the amount invested to reset to zero; then the 'shares added' in the new account would theoretically be accurate (or at least more closely resemble an actual transfer).

    If that doesn't work, the only other thing I know to try is to use the same register for the old and new brokerage accounts. However, this would take a lot more work to combine and could be problematic in the future as my old brokerage account is still active.

    Any other/better ideas for how to approach this would be appreciated.

    -Neale
  • q_lurker
    q_lurker SuperUser ✭✭✭✭✭
    There is also a newer option to move transactions from one account to another. Try it on a copy or with a good backup first. Not something I have worked with yet. 

    I’d stick with the transfer since I place no value on the Amount Invested parameter to begin with. 
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    My recommendation would be to ignore Amount Invested because it is not meaningful by itself. It is useful mainly as a component of other investing measures.
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  • nhicks87
    nhicks87 Member ✭✭
    If I'm understanding you correctly, that's actually the case here already. I use it (indirectly) for ROI. I don't view Amount Invested directly.

    This issue came up because transferring securities caused my ROI to drop by roughly half. Quicken is theoretically implying that you lose half your ROI every time you move securities to a new account. Doesn't make sense.

    -Neale
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    The main performance measures I use are the Avg Annual Return (%) columns in the Portfolio views and the Investment Performance report. These use an IRR calculation which is most useful for periods of 1 year or more.

    The ROI (%) numbers are useful for individual securities and shorter periods, but as you have seen, they are thrown off when you move securities between Accounts.
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