The Nature Of Transfers

When an advisor gets a new client with investments kept at another brokerage firm, they will usually transfer the existing investments to their clearing firm.  After the transfer, they will either maintain the asset or reposition the asset.

When shares of an asset are transferred into the brokerage account, they often represent more than one purchase.  Several tax lots may be involved.  In this case, it is normal for the shares to arrive without any basis or price.  The transfer transaction will often be composed of only a share balance.

No tax lot can be established.

Transfers In

When shares are transferred in from a download, you will get an entry on your exception report that no price was included in the transaction.  The transaction is put into Advisors Assistant, but there is no basis or tax lot established.

Here's how to establish the basis:

1.Navigate to the View Investment With Transactions Screen

2.Double click on the transfer transaction to go to the Modify Investment Activity Screen

3.The Flow field should show Transfer Between Accounts.  If it doesn't, change it.

4.The Type should show Between Accounts Transfer In.  If it doesn't, change it.

5.Review the Principal and establish the share price.  This is enough to automatically establish the basis.

6.If desired, you can enter the basis per share and check Freeze Basis so that the system will not change the basis through an automatic calculation.

Transfers Out

Advisors may or may not be aware of the occurance of a transfer out.  When shares are transferred out without a price, an entry will occur on your exception report. No basis out is established.

Often, the transfer will not be a taxable event so you will want to establish a basis out exactly equal to the current basis.

Here's how to establish the basis out:

1.Navigate to the View Investment With Transactions Screen

2.Double click on the transfer transaction to go to the Modify Investment Activity Screen

3.The Flow field should show Transfer Between Accounts.  If it doesn't, change it.

4.The Type should show Between Accounts Transfer Out.  If it doesn't, change it.

5.Review the Principal and establish the share price.  This is enough to automatically establish the basis.  It will also establish the Account Net Additions.

a)If this is a transfer of all shares, the View Investment Screen already shows the cost basis (if you have been maintaining it for the investments.)  Setting the Principal equal to the Cost Basis will produce a basis out equal to the basis and no gain will be calculated on the transfer.

b)If it is a partial transfer, you will need to calculate the principal for the number of shares being transferred.  Divide the Basis before the transfer (on the View Screen) by the Quantity of shares before the transfer to get the basis per share before the transfer.  Then multiple the basis per share by the number of shares transferred.  The result will be your Principal for the Transfer Out.

6.If desired, you can enter the basis per share and check Freeze Basis so that the system will not change the basis through an automatic calculation.

See Also

Download Exception Review Items

Add / Modify Investment Activity

Download Overview