Switching to a New Broker.

[aviator]

Hi Mark,

In a previous post I mentioned that I'm switching from Broker A to Broker B. I need your help with a couple of questions, but first a few facts:

1. The in-kind transfer of securities from Broker A to Broker B is about 95 percent complete. There's a little bit of cash and an IRA still at Broker A, but everything else was moved successfully.

2. The cost basis for each security has not yet been entered by Broker B. When a security is viewed on their website, it says to call Broker B for CB information.

3. The accounts at Broker B are eligible for download. If I download into FM without CB, what happens? And what happens when Broker B updates the CB after I've already done an initial download -- will FM update CB automatically?

4. I'm anxious to get Broker B's data into FM, but I'm reluctant to do it unless I'm fairly sure that the missing CB won't create headaches. I'd appreciate your thoughts.

Thanks in advance for your help.

[Mark]

Hi aviator,

I would not expect that you can ever retrieve truly correct cost basis for the transferred shares from broker B. If you retrieve now, the shares will probably come in with $0 for the cost basis. Even if they do update the cost basis, it will probably just be a cumulative basis. If you bought over multiple dates, you probably will not get all the dates and different cost basis components. I'm not positive this is how they will do it, but that would be my guess. Maybe this isn't an issue for you, I don't know, but it can affect short versus long term capital gain allocations.

If you already have all your cost basis information entered in from broker A, you can either rename broker A to broker B, and be done, or you can do a bunch of "Transfer Between" wizards to move the shares from broker A's sub-portfolio to broker B's sub-portfolio. Both of these methods will perfectly maintain your cost basis. You can then retrieve from Broker B going forward from here.

[aviator]

Thanks, Mark. Please see my comments/questions below.

I would not expect that you can ever retrieve truly correct cost basis for the transferred shares from broker B.

Got it.

Even if they do update the cost basis, it will probably just be a cumulative basis.

I'm not exactly sure what this means. I think you're saying they'll probably use an average cost basis instead of entering the cost of each lot. I'm OK with that (I think.)

My concern is how will FM handle importing positions that (currently) have a zero cost basis. I understand that the shares will probably come over at $0, but how will FM handle the cost basis when they eventually get around to updating the cost basis to a non-zero amount?

I guess my question is fundamentally this: Should I wait for them to update the cost basis before I download into FM? Or can I go ahead an download the $0 CB today and expect FM to update the CB after they've done it.

Thanks.

[Mark]

Hi aviator,

By "cumulative cost" I did mean the average of all purchased lots.

If you retrieve transactions/positions now the shares will probably come in at a purchase price of $0 and the right number of shares. If the broker then updates the price, and you retrieve again for the same date range, you'll get the same transactions retrieved again, since they are different than before. There is an option "Skip transactions already in Fund Manager", which prevents importing the same transactions more than once, but if they change, they will get retrieved a second time. If you leave on the date filter when retrieving, you would not get the updated transactions, since you've already retrieved for that date. So, if you think your broker will update the cost basis, and you don't want to delete duplicate transactions, or enter the transfers yourself, you should probably wait.

[aviator]

Thanks, Mark, everything you said makes sense.

After deliberating the pros and cons of waiting vs. importing now, I opted to import now. FM behaved just as you said and everything looks good.

BTW, an editorial comment on the hierarchy feature of FM: It's great! The hierarchy allows me to setup my accounts exactly as my broker displays them on their website. It's very convenient and efficient to see my accounts laid out exactly as they are on the website, but with the added benefit of being able to slice and dice any way I wish.

Quicken's hierarchy, if one could even call it that, is at an elementary level -- the ability to segregate, for example, bank accounts from investment accounts. I had to resort to some weird and funky account naming conventions just group my accounts logically.

I'm ready to abandon Quicken for good, as soon as FM allows me to do banking... any chance of that happening?

[Mark]

Hi aviator,

Thanks for the feedback, glad the hierarchy feature is useful for you. We don't have any near term plans for retrieving banking accounts from your broker or bank. You can track banking accounts, but there is no retrieve feature for these type of accounts, which I'm guessing is the main reason why you wouldn't want to switch to FM for banking accounts. It is something we can think about.