Q: Will cost basis reconciliation be supported for other custodians besides Schwab, TD, Fidelity and Pershing?
A: Not at this time. We chose to implement cost basis reconciliation with these Custodians based on their import popularity and their willingness to work with us in putting this process into operation.
Q: When is the easiest time to do the cost basis reconciliation?
A: The easiest time to do the cost basis reconciliation is immediately after the initialization process. This allows you to split out the lots based on the existing deliver-in transactions prior to any sell transactions posting. Once a sell transaction posts for a holding, you can no longer use the Split Initialized Lots function, which is the optimal method since this provides cost basis for the entire history of the account in Morningstar Office. Only users doing an initial import for a Custodian that offers cost basis reconciliation within Morningstar Office will be able to take advantage of this optimal timing.
Q. What does this warning message mean? “The as of date of your lot file(s) is more recent than the last transaction file date you have posted. Please import, reconcile, and post your transaction files prior to importing the selected lot file(s). Click OK to continue.”
A: This warning message is generated when you do not have a transaction file for the day. This file is required to reconcile your cost basis. You must have imported all of the needed transactions to ensure that you have an accurate share balance reconciliation prior to reconciling your cost basis.
It is best to hold off on reconciling your cost basis until the next day that you have a transaction file to reconcile your cost basis. If that’s not possible and you need to reconcile your cost basis, you can create a blank transaction file for the day that you are importing. You will want to look at the previous day’s transaction file and mimic the naming convention replacing the date with the date you are importing. Please follow the steps below.
Open up a Notepad document.
Save with the proper file naming convention. Please see transaction file examples below.
|
TD |
TDyymmdd.TRN |
|
Schwab |
BD Core formatted files - CRSyyyymmdd.TRN Centerpiece formatted files - CSmmddyy.TRD Portfolio Center formatted files - PCmmddyy.SLT |
|
Fidelity |
FImmddyy.TRN |
|
Pershing |
mmddyy.GACT |
When you import for the day, your transaction file box should be checked on the Custodian import screen and you should have no transactions in your Transactions blotter.
Q: I have already imported and posted for the day, but want to go back in to do my cost basis reconciliation, how do I do that?
A: If you have not imported for another custodian, you can click on Import, select the Custodian by checking the box to the left of it,and then from the Action menu above the grid, select View Blotter. This will open the blotter where you left off. You can then click on Imported Open Lots and Reconcile.
If you have imported for another custodian, then follow the steps below:
Select your Custodian by checking the box to the left of it, and then click on Import.
Select your Last Custodian File Date as the Start Date and End Date.
Uncheck the Transaction File box and click Import.
Q: What file types are needed and Used during the cost basis reconciliation process?
A: These are the daily open lot files for the supported custodians.
|
TD |
TDyymmdd.CBL - Cost Basis Open Lot file |
|
Schwab |
CRSyyyymmdd.ULT - Unrealized Gain/Loss Open Lot Taxable file CRSyyyymmdd.ULN - Unrealized Gain/Loss Open Lot Non-taxable file |
|
Fidelity |
FImmddyy.UGL |
|
Pershing |
mmddyy.POTL |
Q: Why do I have new User Defined Securities adding now that I’m importing my Cost Basis files?
A: Your Custodian may be sending down a different ticker in the cost basis reconciliation files than the ticker that is sent down in the position file. These securities will be given a Security Type of “Other” by default. If there is a more appropriate security type, then you can click in the Morningstar Mapped Security Type field and select the most appropriate security type.
If there is a Morningstar security that is a good match for this unrecognized security and the Morningstar security is also the one used in your accounts in Morningstar, then you can map it to appropriate Morningstar security. To do this click on the magnifying glass in the Morningstar Mapped Holding field and select the Morningstar security.
Q: When I reconcile my Imported Open Lots, why am I getting the warning message stating, “Please reconcile and post your transactions before proceeding to lot-level reconciliation. If you would like to post your transactions now, click OK. Click Cancel to go back.”
A: You must post your transactions for the day before reconciling your cost basis. If you have already posted transactions, check your Corporate Actions and Cash in Lieu blotters to be sure there are no transactions in there. If there are, please post if able, export if you plan on manually entering in the transaction later or importing via Excel, or wait to do the Cost Basis reconciliation until these transactions can be posted.
Q: Why am I receiving the following error? “Custodian did not provide lot acquisition date. This lot will be excluded from lot reconciliation.”
A: You are receiving this error because the custodian did not provide the acquisition date that Morningstar Office needs to reconcile the lots. These lots will be excluded from the reconciliation. You can contact your custodian to see if the information can be added to the lots. If so, once the cost basis files are updated and you import these updated files, the lots should be excluded in the reconciliation.
Q: On my Unmatched Deliver-ins screen I am getting a red warning message that says “This deliver-in transaction is partially closed in Morningstar’s system or your custodian’s system. Therefore, this transaction cannot be split because there is not enough information from your custodian’s open lot file to correctly split this transaction.” What do I do?
A: Morningstar cannot split your initial Deliver-in transaction since the share quantity no longer matches the share quantity of open lots. You can use the Re-initialize Lots option or manually update original transactions with Cost Basis.
Q: What if I get a blank Unmatched Deliver-in screen when trying to Split Initialized Lots?
A: There are multiple reasons why this could occur.
If the holding is starting out with a Credit of Security transaction type instead of a Deliver-in, the Unmatched Deliver-in screen will show up blank. You can change the Credit of Security to a Deliver-in by clicking on the ‘View Transactions’ magnifying glass, right-clicking on the Credit of Security and choosing Edit and then changing the transaction type. Please keep in mind, that Credit of Security transactions are usually used for corporate actions. If this transaction type should remain a credit of security, then you can change it back to this transaction type after using the Split Initialized Lots feature. These Credit of Security transactions will need to net out with Debit of Security transactions to have accurate reports and avoid a Data Inconsistent warning message when running reports.
The security type being sent in the tax lot files could be incorrect. Verify the setting in the Security Type column.
This could also be an issue with a ticker mismatch. Make note of the ticker that is in your Mismatched Lots screen as well as the account number. Now go to the All Positions blotter and search for the account by typing the account number in the Search for box at the top and click Go. Find the holding in question and compare tickers.
If you import from Pershing, and they are sending down a different ticker for their money market holdings than what is sent in the regular security/transaction files, these cannot be reconciled.
If you Import for Schwab and have found that the tickers do not match then this could be an issue where Schwab is sending down their internal ticker in the position file, but sending down the mainstream ticker in the cost basis reconciliation file.
If you are okay with having the mainstream ticker in all of your accounts in Morningstar that currently hold the internal ticker and to show up on reports, then you can do a security replacement to get the mainstream ticker in the account. Please follow the steps below.
Note: Making changes in the Definition Master will have a global effect. Please proceed with caution. If you are not 100% confident in what you are doing, please call Support at 1-866-215-2503 for assistance. By following the steps below, you will globally replace the User Defined Security containing Schwab’s internal ticker with a Morningstar Security that contains a mainstream ticker in ALL accounts in Morningstar Office that contain that specific User Defined Security.
Go into the Definition Master (Tools > Edit Definition Master).
Go to the Security Mappings tab and find the security with the internal Schwab ticker.
Verify that the Use As Substitute field is currently set to No.
Click the magnifying glass in the Morningstar Ticker field.
Find the correct Morningstar match for the security, select it, and click OK. The Morningstar Ticker and Morningstar Security Name fields should now be populated.
Click Save at the top of the screen.
Find the security again.
Change the Use As Substitute from No to Yes.
A confirmation box appears, stating: “Click OK to replace XXXXXXX with XXXXXX in all accounts. Click Cancel to return to Definition Master. Click OK to continue, click Cancel to stop.” Click OK.
A pop up box displays the account numbers that have been affected by this change.
Now you will need to move imported pricing.
Go to the Securities tab in the Definition Master.
Find the original security.
Scroll over to the right until you see the Prices column, click on the Prices magnifying glass.
Select the first Month box in the top right. This will create a black box around the cell.
Make note of the last row that has pricing and scroll all the way over to the right.
Hold your Shift key down and select the Day 31 box of the last row that has pricing. This will create a black box around all of your pricing.
Click Ctrl + C to copy the pricing.
Click Exit.
Go to the Morningstar Securities.
Find the Morningstar Security. If it is not there, click on the Add button and add it in.
Find the security in the list and change the Price Source to Imported Price.
Click on the magnifying glass in the Prices column.
Select the month cell in the first empty row.
Click Ctrl + V to past the pricing.
Click Save + Close.
Set the Price Source to the desired option: Morningstar Price or Imported Price.
Click Save up at the top.
Exit out of the Definition Master.
Go to the Imported Open Lots blotter and re-reconcile that account(s) involved.
Go to the Mismatched Lots blotter where you should now be able to Split Initialized Lots.
Q: I am using Tax Lot Optimizer/Tax Loss Harvester and have mismatched lots. Morningstar Office does not have this as an option for tax lot method. What do I do?
A: If you are using Tax Lot Optimizer/Tax Loss Harvester at your custodian, you will need to use the Specified tax lot method in Morningstar Office.
Q: Why am I receiving this error? “The share balance in Morningstar does not match the share balance in your Custodian’s open lot file. Please reconcile your share balance before proceeding. To see your share balance discrepancy, go to the Failed Blotter and Reconcile.”
A: This could be because you have an out of balance in the share balance reconciliation. You can check by clicking on the ‘Failed’ blotter on the left-hand panel and then clicking Reconcile. If the holding is out of balance here, you will need to fix the discrepancy before you can use the cost basis reconciliation tools.
If the holding is not out of balance, there may be more than one deliver-in with different dates. The cost basis reconciliation only looks at the first deliver-in listed, so if there is more than one, the system does not recognize any after the first. You can check this by clicking the ‘View Transactions’ magnifying glass in the Mismatched Lots screen. If you see more than one deliver-in listed, you can combine them into one and then Split Initialized Lots.
Q: Split Initialized lot isn’t working and when manually checking the lots everything seems to match.
A: If you have sells for this holding and more than one transaction that adds shares on the same date, the transaction order may be incorrect and the sell may be depleting the incorrect lot. You can check the transaction order by opening the account within the Morningstar application under either Client Management or Portfolio Management. Once the account is open, right click on the holding and choose ‘Set Transaction Order’. In the date field, type in the date where there are multiple transactions. Make sure the lot that should be depleted is on top. You can compare the order of Morningstar’s transactions to the order in the lot details on your custodian.
There are currently no FAQs for this section.
Q: What if I do not want to reconcile a particular holding?
A: To exclude a holding from cost basis reconciliation, you can put a check next to the line item, click on Action and choose Exclude Holding.
See Also
Importing and Reconciling Tax Lot Data in Morningstar Office