The market value on PortfolioCenter reports frequently differs from the market value on the brokerage statements. In every case, the PortfolioCenter value is more accurate.
Here’s why the numbers may not match:
- Some mutual funds distribute dividends late — meaning dividends earned in the previous month arrive in the downloads after the month has ended with a trade date in the previous month. The PortfolioCenter market value includes these late dividends. Brokerage statements do not.
- The actual ending value has changed since the statement was printed. For instance, if a trade error, a corrected dividend or a refunded fee crosses the end of the month, the statement will not reflect the correction, but PortfolioCenter will.
- The number of decimal places used in prices may vary. Most statements use 2 digits after the decimal on their statements while PortfolioCenter can take the prices out to 4 digits after the decimal.
- PortfolioCenter always calculates the value based on the trade date while some statements calculate the value based on the settlement date. If a trade crosses the end of a month, the brokerage statement will omit it, while PortfolioCenter will include it.
- A few statements use the prices of the last Friday of the month to calculate their ending value. PortfolioCenter uses prices from the last business day of the month.
- A few statements round their share quantities to the nearest whole number even though fractional shares are held in the account. PortfolioCenter does not round share quantities.
What difference does this make to you?
1) You don’t need to waste time tracking down the specific dollar differences as long as you have complete, accurate reconciled data — although you probably want to be able to provide clients with a general explanation as to why numbers don’t match.
2) You need to decide which value to use to compute your management fees and then be consistent.
Having basic understanding of brokerage statement/PortfolioCenter variances and a written, explainable policy on computing management fees will help you in an SEC audit.