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Management Fees Report.

General questions about using Fund Manager that do not fit into any other forum.

Postby aviator » Sun Apr 14, 2019 7:38 am

Hi Mark,

Welcome back from vacation. We missed you :D

I have two questions I'm hoping you can resolve without a phone consultation:

1) In the advisor version, what is the relationship between my client list and my .mm4 file? Since upgrading to the advisor version, I'm now presented with a request for a password for the client list file which automatically opens my .mm4 file. Kinda confusing to the uninitiated...

2) Below is an illustration of a sub-portfolio for which I'm trying to calculate management fees. The family member (brother, sister, etc) is a sub-portfolio under the entire family, and each family member has one or more sub-portfolios under their name (not shown in illustration). In the advisor version, I treat each family member as a client. I've assigned an owner to each sub-portfolio and assigned a fee method at the family level, as shown.

My objective is to see management fees by family member (or client). Although I select subtotal by client, the reports lists each family member's sub-portfolio listed individually not subtotaled by family member. Although the totals are correct, the subtotals are nonexistent.

Thanks.
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Postby Mark » Sun Apr 14, 2019 8:20 am

Hi aviator,

Thank you, glad to be back.

1) You have only 1 client list, and it is global. You can have as many *.mm4 files as you want, but usually you only need/have 1. The client list has all your clients, and when defining a client you can pick their *.mm4 file and sub-portfolio within that *.mm4 file. Again, it is usually simplest to just have one *.mm4 file, with all clients pointing to that same *.mm4 file.

When you password protect your data, it protects all your data (client list, the current *.mm4 file, and all your *.dat files). When you open FM, it will prompt you for a password upon trying to open any of these password protected items, so if the first thing it opens is the client list, you'll see the password prompt for that. It applies that same entered password to any subsequent opened password protected data, and as long as it matches, it doesn't keep prompting you.

2) The Management Fee report will only list sub-portfolios that have an assigned management fee method. So, in your example, you would only see the "Family" sub-portfolio listed, and it would include fees from all the sub-portfolios. This is from the online help:

Only sub-portfolios with an assigned management fee method will be listed in the management fees report.

When a sub-portfolio has a management fee method that is based off managed value, the managed value is determined from all investments in that sub-portfolio and all child sub-portfolios that do not have their own assigned management fee method. If a child sub-portfolio has its own management fee method assigned, its value is excluded from the parent's managed value.


If you assign the management fee method at each family member level, and not at the family level, you will get each family member's fees listed. You probably should also not define a client to own Family, as each lower level sub-portfolio is owned by a different client.
Thanks,
Mark
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Mark
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Postby aviator » Sun Apr 14, 2019 8:41 am

Mark wrote:If you assign the management fee method at each family member level, and not at the family level, you will get each family member's fees listed.


I tried that, but here's the problem. Brokerage fees for this family are calculated at the family level. Each family member then pays their prorated share of those fees. If I assign a fee method to each family member, it calculates the fee as if that family member is not part of the entire family; it applies the fee method to the value of each family members sub-portfoli (as it should). But this forces me to calculate each family-member fees with a spreadsheet. What I really need to see is the fees sub-totaled by family member, already prorated based on their percentage of the total. (Based on the example in my original post -- with no fee assigned to each family member -- the report total is correct. What I seek is a subtotal by each family member.)


Mark wrote:You probably should also not define a client to own Family, as each lower level sub-portfolio is owned by a different client.

Got it. How do I un-assign an owner to a sub-portfolio? There's no clear way to delete, when I tried blanking out the name field, I end up with a blank record in the client list.

Thanks.
aviator
 
Posts: 364
Joined: Thu Jul 09, 2009 4:47 am

Postby Mark » Sun Apr 14, 2019 10:43 am

Hi aviator,

Are you using a management fee method that is tiered? If not, then assigning the fee method at the family member level should add up to the same total as assigning it at the family level.

The Management Fee report won't do what you're describing. You can't have it calculate the fee at the Family level, and then report a breakout by family member.

To delete a client, use the Client List (Edit / Client List...) and select them from the list, and choose the "Delete" button towards the bottom of the list.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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Postby aviator » Sun Apr 14, 2019 1:27 pm

Hi Mark,

Yes, I am using a tiered management fee.

Again, assigning it as I have in the attachment (along with the account owner) does indeed calculate the fees correctly at the family level and, of course, at the family member level. Absolutely no problem with that. The only problem is that I'm not getting subtotals at the family member level -- each account for each family member is correctly listed. But for those family members with multiple accounts (sub-portfolios in FM), each account is listed separately with no subtotaling at the family member level.

Regarding deleting a client, I mean how does one delete the client from the account properties? I'm assuming your method will delete the client for *every* account owned by that client? That's not what I want. I just want to remove the client from one account.

Perhaps we should set up a phone call. Perhaps you let me know two or three days/times that work for you and I'll accommodate. Thanks.
aviator
 
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Postby Mark » Sun Apr 14, 2019 2:23 pm

Hi aviator,

Yes, if you're using the tiered method, you would need to leave the management fee method assigned at the family level. Since you are seeing the sibling sub-portfolio amounts, and you don't have a fee method assigned to those sub-portfolios, you must have on the "Report Fees at Account Level" option for the management fee method, as described in this documentation:

Tiered %:

Varying percentages can be applied to the managed value, where the percentage changes at different value levels. When using the tiered %, an option to "Report Fees at Account Level" is made available. Select this option to have the calculated fees divided up proportionally between all sub-portfolios with an assigned account number. This option can be useful when you want to calculate the fees at a household level, but reported at an account level.


In this case, if you turn on the report setting to sub-total by client, you are only going to see a sub-total for the client owning the whole Family sub-portfolio, as that is the only sub-portfolio with an assigned management fee method. The lower level sub-portfolios are broken out because of that option, not because of any assigned client owning them. You will get a listing for each sub-portfolio that has an assigned account number, so if one of the siblings owns multiple accounts, you'll get the amount for each of their accounts, but not a total for that client, which is what I think you're looking for. Assigning a client to own sub-portfolios without a management fee method results in no sub-total or listing for that client. If you wanted to sub-total the account level fees by siblings where they own multiple accounts, you'd have to export the report to Excel and do it manually.

A client can only be assigned to own a single sub-portfolio. A client owns their one assigned sub-portfolio, and everything beneath it. You do all the assigning from within the Client List dialog, not from within the properties of a sub-portfolio. If you have a client that owns a particular sub-portfolio, go edit what they own in the Client List dialog. If a client doesn't own anything, you can delete the client.

9am PST any day M-F is usually a good time to call.
Thanks,
Mark
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Postby aviator » Mon Apr 15, 2019 6:28 am

Mark wrote:Yes, if you're using the tiered method, you would need to leave the management fee method assigned at the family level. Since you are seeing the sibling sub-portfolio amounts, and you don't have a fee method assigned to those sub-portfolios, you must have on the "Report Fees at Account Level" option for the management fee method, as described in this documentation:


This correct. I have it set up as you describe.

In this case, if you turn on the report setting to sub-total by client, you are only going to see a sub-total for the client owning the whole Family sub-portfolio, as that is the only sub-portfolio with an assigned management fee method. The lower level sub-portfolios are broken out because of that option, not because of any assigned client owning them. You will get a listing for each sub-portfolio that has an assigned account number, so if one of the siblings owns multiple accounts, you'll get the amount for each of their accounts, but not a total for that client, which is what I think you're looking for. Assigning a client to own sub-portfolios without a management fee method results in no sub-total or listing for that client. If you wanted to sub-total the account level fees by siblings where they own multiple accounts, you'd have to export the report to Excel and do it manually.


Got it. I got tripped up on the "sub-total by client" option. I took it literally thinking that regardless of combination of fee method and account ownership, I would get subtotals by client (family member).

Have any FM users attempted what I'm trying -- essentially running a family office by substituting family members for clients?
aviator
 
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Postby Mark » Mon Apr 15, 2019 7:05 am

Hi aviator,

I know there are quite a few people using it for a family office. I don't recall ever running into this specific question before. I can understand why you'd want this.
Thanks,
Mark
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Postby aviator » Mon Apr 15, 2019 7:34 am

Based on my rather limited use thus far, it feels like it will work for my family. Management fees was the one area where we had no transparency until I started using the advisor version.

Now that I've got a handle on fees, I can see the Executive Summary being much more useful than what we get from our broker (namely because of timeliness but also because for the option of showing fees plus distributed distributions, something I've had to supply manually in the past). I'm sure I'll have many questions about that report, so for now I'll not waste your time with a phone consult.

Thanks for all your help.
aviator
 
Posts: 364
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Postby aviator » Tue May 28, 2019 12:29 pm

Hi Mark,

I am running a Management Fee report over two sub-portfolios. Each sub-portfolio has the same management fee assigned.

When I run the report over sub-portfolio A, I get totals sub-totaled by owner. This is expected.

However, when I run the report over sub-portfolio B, nothing is subtotaled. When I click on the non-subtotaled report, it takes me to the portfolio value report which isn't what I want. I'm just trying to get management fees by account (sub-portfolio).

As far as I can tell, the properties of both sub-portfolios are identical. What am I doing wrong?

Thanks,
aviator
 
Posts: 364
Joined: Thu Jul 09, 2009 4:47 am

Postby Mark » Tue May 28, 2019 12:52 pm

Hi aviator,

Sub-totals for the Management Fee report are by "client" (not sub-portfolio). The clients are defined and assigned to sub-portfolios under "Edit / Client List...". It sounds like your clients are assigned to own sub-portfolios under one of these 2 sub-portfolios. Go edit your client list, and pick a particular client. Edit that client, and look in the bottom/left section of the "Client Information" dialog, and you'll see the "Associated Portfolio" section. This is where you define which sub-portfolio this client owns.
Thanks,
Mark
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Postby aviator » Tue May 28, 2019 1:08 pm

OK, thanks. My Associated Portfolio field is grayed out, not input capable. It's that way for all my clients.
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Postby Mark » Tue May 28, 2019 1:48 pm

Hi aviator,

This means the selected *.mm4 portfolio file is not the one assigned to all your clients. When you assign a sub-portfolio to a client, it remembers the *.mm4 portfolio file, and the sub-portfolio within that *.mm4 portfolio file. You typically want to just use one *.mm4 file. You can see which *.mm4 file you have open now by looking at the Properties... of any sub-portfolio, under "Statistics / Filename". If you then go back and "Browse..." to this same *.mm4 file in the Client Information dialog, you can pick any sub-portfolio currently open. You will also be given the option to apply this *.mm4 file change to all your clients, so you don't have to edit all of them. If the path to your *.mm4 file is changing for some reason (like the drive letter changes), this would also cause FM to think you are using a different *.mm4 file than you assigned to your clients. The *.mm4 path and filename are stored for each client, so if that changes, you would need to update it.
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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Posts: 8801
Joined: Thu Oct 25, 2007 2:24 pm
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Postby aviator » Tue May 28, 2019 3:10 pm

OK, got it. Everything working after I followed your instructions carefully and have the client list pointing to the right .mm4 file. Saved and restarted FM and all changes I made to client list are still there. All is well.

Quick question: I have a couple of sub-portfolios that are currently hidden yet still appear in the management fee report (but with zero managed values and zero fees). Has no affect on totals other than an annoyance, is there a way to make them go away?
aviator
 
Posts: 364
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Postby Mark » Tue May 28, 2019 4:00 pm

Hi aviator,

Yes, edit the properties of these sub-portfolios, so they don't have an assigned management fee method.
Thanks,
Mark
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Mark
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