how do i record advisory fees

leonidshower

I have seen various answers on this general topic. I dont think any of them exactly work

according to me, you have an investment account, and the manager takes an advisory fee. this fee downloads as a withdrawal and thus as a return to you. However, you never see the money. Therefore, this is an expense and should go against your return. In other words, your return should be reduced because you are paying these fees.

so, i tried setting reentering the transaction as a misc expense. Comes across as a return (this seems wrong to me)

Therefore, I tried reentering the transaction as a misc expense this time with a fake security (called quarterly fee). the expense does disappear from the return column (that seems correct). However, when i run the report and select all securities except the fake security, the fake security transaction now comes out in the investments column. this has the effect of actually adding to your return (this seems wrong)!!!

my opinion is that advisory fees should not come across in the quicken download as withdrawals, rather as expenses. Quicken calls these expenses part of your return, but I do not know why an expense is then counted in the return column. it seems the correction would be to not include expenses in the return column

Jim_Harman

The trick for recording the advisory fees if you want the fee to reduce the account's performance is to go to the Category List and select the Category you use for the fees. Edit the Category and check the Affects investment performance box, like this

The Help for this is very unclear, but the effect of checking the box is to have any expenses that use the category not be included as Returns in the Investment Performance Report.

I would record the fee as a MiscExp, without selecting a security.

Michael Rosen

3/6/2023	3/6/2023	245026	Fee	Target Retire 2035 Tr II	43.11	0.22	9.5

The other transactions are Plan Contribution then a transaction like this. I think it looks like a sale of shares to cover the fee?

How do I enter this transaction?

Thanks.

Frankx

Hi @Michael Rosen

Yes, that is an entry where shares in that particular investment (or fund) were sold to pay a periodic fee charged by the Plan. You should enter it as a sale of 0.22 shares for which the price of the shares when sold was $43.11 and the fee paid with the proceeds was $9.50

I suggest that you make two entries to record this. The first is an entry which records the sale of the fractional shares using the three data points noted above. That will leave you with cash in the account of $9.50. The second entry is a "Miscellaneous Expense" entry that should look like this:

Clr	 Date	 Action	Num	Payee	Category	 Share Bal	 Inv. Amt	 Cash Amt	 Cash Bal					Memo	Xfer Acct		
	01/02/2024	MiscExp	Num	Payee	Invest Exp		-10.00	-10.00	0.00					To record Recordkeeping & Management Fees		

But you'll use $9.50 as the amount rather than the $10.00 in the above example.

Let me know if you have any followups.

Frankx

leonidshower

Thank you, Jim I think it works now. Odd that anyone would even think you had to tell Quicken this, but there it is…

Jim_Harman

Also please see this discussion

https://community.quicken.com/discussion/7947258/how-do-i-record-advisory-fees