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Scottrade FRIP Flexible Reinvestment Program

Questions about updating prices or transactions in Fund Manager

Postby Homer » Mon Dec 21, 2015 8:43 pm

I have some accounts in Scottrade that I have set up their Flexible Reinvestment Program (FRIP) that pools dividends and then purchases lots of selected investments on a schedule (mine is quarterly). Now when I import transactions and receive a dividend, I get three (3) entries in the Data Register for each distribution. Two are type "Dividend" for the dividend amount and one is an offsetting entry, Type "Account Fee", I suppose to show that the dividend amount was credited to the FRIP pool balance. Is this going to be misinterpreted by any of the graphs or reports in Fund Manager? It makes the Distribution Summary report look odd, but since the FRIP stuff nets out, the resulting Total and Div Yld numbers are correct. And the Price + Distributions graph just shows the distribution, like it always has.

Thanks!
Homer
 
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Postby Mark » Tue Dec 22, 2015 9:26 am

Hi Homer,

Is the Account Fee negative, and the 2 dividends positive, and all 3 for the same amount? I'm not sure of exactly how that plan works, but if the money is kept separate, it sounds like you might just need a single dividend, and then put the cash either in your regular cash account, or a separate cash account if you want to isolate the FRIP balance from your other cash. When you reinvest, just record a purchase in the stock, and sell whichever cash account was holding your FRIP cash. Having 3 distributions seems redundant/confusing.
Thanks,
Mark
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Mark
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Postby Homer » Tue Dec 22, 2015 11:09 am

Mark,

Yes 2 entries are positive and 1 is negative. It nets to the normal amount as a distribution for the security. It does the same thing to the Cash account, 2 in, 1 out. Then when a purchase is made by the FRIP, the cash account is reduced by the trade amount (no commission charged, yay!) so things should stay in balance. The Investment Transactions report shows whats going on, I just hope the performance and yield tools can handle it.

If you need more details, please let me know.

The FRIP ( a Scottrade product) is similar to a DRIP, except you get to pick what you buy over time. So instead of buying small lots of a bunch of securities, you make regular purchases of larger lots of one or more different securities commission free. I throw mine into a municipal bond fund to generate tax free income, until I want to invest in something else. I really like it so far, as long as it doesn't mess up Fund Manager.

If you know of any other concerns please let me know.

Thanks again and Happy Holidays.
Homer
 
Posts: 35
Joined: Wed Nov 19, 2008 8:46 pm

Postby Mark » Tue Dec 22, 2015 11:23 am

Hi Homer,

That sounds fine. You can keep it that way, or you could simplify it by deleting 2 of the 3 distributions, so you only end up with a single positive dividend, plus the 1 cash entry. Having the other 2 cancel each other out, so you might want to delete them to simplify things. If it happens a lot, and you don't want to manually un-check them during retrieving, it is also fine to just leave them. The net result is the same either way.
Thanks,
Mark
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Mark
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Postby divinest » Sat Sep 16, 2017 9:20 am

One item i did notice, if the distribution for FRIP is marked as Account fees (which is the default) selection, that does factor into the returns/unrealized gains. So If i select type of Other or user defined (FRIP) there is no impact on the returns calculation on the main portfolio editor window
divinest
 
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Postby Mark » Sat Sep 16, 2017 9:46 am

Hi divinest,

With the default options, all distributions, no matter their type, will be included in returns. (You can disable account fee type distributions from affecting returns.)

Account Fees however are a special type of distribution when it comes to calculating tax cost basis. By default, Account Fees are added to your tax cost basis. You can disable this too if you want.
Thanks,
Mark
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Mark
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Postby divinest » Sat Sep 16, 2017 9:57 am

Thanks Mark, is there an option that i can select to disable account fee type distributions, i am using FM 2016 Personal
divinest
 
Posts: 149
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Postby Mark » Sat Sep 16, 2017 10:11 am

Hi divinest,

If you are retrieving transactions, and something is reported as an Account Fee, that is how it will be recorded. There is no option to change this, but you can change whether account fees are added to your cost basis. Create a Capital Gains report, and from within the report window choose "Options / Report Preferences... / Capital Gains" and turn off "Include Account Fees in Basis".
Thanks,
Mark
Fund Manager - Portfolio Management Software
Mark
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Posts: 11253
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