Cost Basis Basics: Preparing For The New Reporting Requirement

Wednesday, December 15, 2010 14:48
Cost Basis Basics: Preparing For The New Reporting Requirement

While it's easy to pick on Advent Software because of the company's strategy with independent advisors, there are some things te company does well. Its summary of the news cost-basis rules is an example of that.

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"Cost basis reporting will have firm-wide impact, from operations to client relations," Advent says in its summary explaining the cost basis rules. "It will require clear coordination and alignment among RIAs, brokers and custodians, not to mention with investors and their tax advisors."

Advent has lon been a controversial company and is strategy with RIAs has long been puzzling. Just ths week RIA Biz carried a story reporting that Advent is "squandering its market leadership by keeping focus on Axys," ciiting a hedge fund analyst's report. Meanwhile, I've received calls from short-sellers recently asking about the company.

Advisors have long had a love/hate relationship with Advent. Axys is reliable. Trouble is, it's based on 1980s technology. Advent's newer portfolio accounting system, Portfolio Exchange, is a great platform. Trouble is, it's so expensive. 

But Advent does a lot of things right, as this plain-English sumamry of the new cost-basis reporting rules shows. 

Would be intersted in hearing comments from A4A membes about how you're planning on coping with the new reporting rules and whether you're getting the support needed from your custodian.

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