Shares transferred between accounts

Gary R

Back in January I posted a question about shares transferred between accounts.
I had four Vanguard accounts being transferred to Fidelity for Professional Management.
I received many replies how to handle the transaction and it was generally agreed to just do my normal portfolio update and Vanguard would show shares removed and Fidelity would show Shares added.
I'm just throwing this out since I believe there is a better way to handle this in the future.
If I had to do this again, I would have gone to each Vanguard account and move all the securities to the new account number in Fidelity. Then, I would have simply deleted the Vanguard accounts since they will have no entries.
I tried this yesterday with another account and it worked perfectly.
Bottom Line--Instead of using shares transferred between accounts, it was much better just to move all securities to the new account, and delete the old one.

Jim_Harman

When you say "move all the securities" do you mean "move all the transactions"?

An advantage of doing a Shares Transferred between accounts is that only the current holdings get moved and the new account does not get clogged up with potentially thousands of old transactions.

Gary R

Hi Jim--Yes----Move all transactions
Originally, I was told not to use shares transferred between accounts and just wait until I go to the portfolio register and do the update. That's what I did and ended up with tons of removals from Vanguard and tons of Add to Fidelity.
Every transaction was entered in Fidelity from each purchase and removed from Vanguard.
I don't like the way it was done. In the end, if I go to the register and view returns year to date, it's messed up and I know why. I have to go to the reports, investment performance, to see YTD returns.

Jim_Harman

With a Shares Transferred between account you get one Removed for each currently held security in the old account. and one Added transaction for each current tax lot of each security in the new account. If you have been reinvesting dividends. this can be a lot of tax lots. The original transactions remain in the old account.

To see performance over a period that includes the transfers, I use the Investing Performance report and include both the old and new accounts.

miklk

Using the Shares Transferred would be the best way and would have preserved the cost basis. 

Chris_QPW

Personally I believe that if all the accounts/securities are going to be transferred then the best process is to actually just reuse the same account (deactivate and then reactivate for the new financial institution) and clean up any overlap.  Or if not all the securities are transferring to use Move Transactions to move all the transactions from that security.  One can use Archive Transactions after that to move closed lots to another account to help with performance.

The main reasons I recommend this is because Shares Transfers creates a lot of transactions, and what's more even though it does preserve the cost basis it doesn't preserve other information like the Return numbers.  So if one wants their investment data to look exactly like it did in the old account the only way is to move all the transactions.

The one disadvantage of moving the transactions is that you don't have the "account history" any more.  As in if one wanted to ask the question "What financial institution was I using in year XXX" it show Fidelity instead of Vanguard for the past years.

Note that in the past there wasn't a move transactions function, and move shares was the only choice.  So I think the recommendations might be a bit old using move shares, but on the other hand there are cases where move shares is the only way to do it.

Jim_Harman

Looking back at your discussion from January, it appears that your issue was with the "Amount Invested" numbers in the Portfolio views after moving shares between accounts. As we tried to explain at that time, Amount Invested is useful mainly as a component of other investment calculations and not as a measure by itself.

Cost Basis is different from Amount invested. It is needed for capital gain and loss calculations in taxable accounts and is preserved correctly if you use Shares transferred between account to move your securities.

The only reliable performance measures I have found in Quicken are the Investment Performance Report and the Avg. Annual Return (%) columns in the Portfolio views. These use an IRR calculation that agrees with Excel's XIRR function.

Chris_QPW

Jim_Harman said:

Looking back at your discussion from January, it appears that your issue was with the "Amount Invested" numbers in the Portfolio views after moving shares between accounts. As we tried to explain at that time, Amount Invested is useful mainly as a component of other investment calculations and not as a measure by itself.

Your judgement of what is or isn't good way to track investments isn't the point.

The point is that if one wants the investment data to appear exactly like it did when it was in the first account then they need to transfer all the transactions.

You might not be concerned about the other calculations that will be different/wrong because of the missing transactions, but I am, and I'm sure their are others that are too.

And for the record I'm not using Amount Invested directly (that was another user that didn't understand what that number really is in Quicken), but that number goes into other calculations that I do look at.

Gary R

Jim---I had other issues in January resulting from the way the transfers were done. However, Chris hit the nail on the head--I agree with him 100%---I should have just simply MOVED all securities from each Vanguard account to each Fidelity account. I would then delete all the Vanguard accounts.
Now, when I would do my first portfolio update on Fidelity for each account, there probably will be duplicate transactions that I would just delete. (I'm assuming that)
I would end up with the exact holdings in each Fidelity portfolio that was previously in Vanguard.
Just a name change---nothing more.
This would have been so much better than all the removals and additions that were previously done.

q_lurker

Gary R said:

Back in January I posted a question about shares transferred between accounts.
I had four Vanguard accounts being transferred to Fidelity for Professional Management.
I received many replies how to handle the transaction and it was generally agreed to just do my normal portfolio update and Vanguard would show shares removed and Fidelity would show Shares added.
I'm just throwing this out since I believe there is a better way to handle this in the future.
If I had to do this again, I would have gone to each Vanguard account and move all the securities to the new account number in Fidelity. Then, I would have simply deleted the Vanguard accounts since they will have no entries.
I tried this yesterday with another account and it worked perfectly.
Bottom Line--Instead of using shares transferred between accounts, it was much better just to move all securities to the new account, and delete the old one.

Referencing your January question (https://community.quicken.com/discussion/7886040/shares-transferred-between-accounts#latest), I don't think that is what you were told (underlined above), though I did see several other posts from you on this topic.  

What I read that you were told (by @splasher) was to a) do a final One Step update to get all transactions included, b) discard any transactions downloaded in any final OSU related to this transfer, and c) use a Shares Transferred between accounts to accomplish the event within Quicken.  I concur with that advice as being effective.  It is what I might do.  Multiple people have long pointed out that the downloads from the FIs are generally inadequate and incomplete with respect to transfers.

If appropriate, I might instead do as @Chris_QPW just suggested and simply convert the FI on the existing account from old (Vanguard) to new (Fidelity).  

While Quicken has recently introduced the tool to move investment transactions from one account to another, I doubt that I would ever consider doing that for this type of situation.  

To each his own.  YMMV.  One of the reasons for multiple tools within the program is so that users can do things that best fit their needs.

Gary R

I did follow Splashers advice and did the shares transferred between accounts first and then went through the portfolio update. I'm sorry that I didn't explain that correctly. The problem is that when I click on a security there are now tons of transactions, all initial purchases, reinvestments, removals and adds for each security. None of this would have happened if I just used the Move feature in Quicken to the new Fidelity account. I'm not lying---some of my securities now have 50-75 transactions where they should only have maybe 20-25.
Also, Year to Date Returns for each account is now messed up with the way it's handles. I have to go to the Performance Reports to see the returns for each account.