What do you do if cost basis in PortfolioCenter reconciled with your broker yesterday but fails to reconcile today?
I recently encountered a position with relatively few trade lots (4 lots: 1 buy and 3 reinvested dividends). The cost basis reconciled to the penny and fourth decimal. After posting the first and only sell for the holding, the cost basis in PortfolioCenter no longer reconciled with Schwab. Now what? Here’s how I tracked down the problem.
- I verified that both Schwab and PortfolioCenter used the same matching method, they sold the same lots and ended with the same quantities. They did.
- I verified that the total cost basis dollar amount in PortfolioCenter reconciled with Schwab before the sell by re-running the cost basis reconciliation report from the day before the sell. No problems on the report.
- I used the trade lot reconciliation tool to compare each trade lot in PortfolioCenter with each trade lot at Schwab. The share quantities of each lot were identical both before and after the sell. But I finally found the missing piece of the puzzle. The dollar amount of the cost basis of each trade lot did not match after the sell (as expected), but neither did it match BEFORE the sell.
Because the total cost basis dollar amount matched to the penny, the position was never flagged as unreconciled on the cost basis reconciliation report. However, the cost basis dollar amount on each individual lot differed.
At this point you could waste a lot of your time asking why. Since the total cost basis is the same and Schwab is the system of record, I decided answering the question who is “right” was pointless, better to adjust PortfolioCenter to match Schwab.
To adjust PortfolioCenter, cancel the sell, adjust each trade lot to match Schwab (using the most appropriate method) and re-post the sell. Problem solved.
Resources:
Entering Historical Cost Basis
Using the Income Reclassification Wizard
Using the Cost Basis Reset Wizard
Resetting the Historical Accounting Method for Mutual Funds