Daily TWR Precision / End-of-Day vs. Beginning-of-Day Flow Assumptions
In many portfolio accounting systems, all flows are considered to occur at beginning-of-day which can result in performance errors, especially with mutual funds. For example, if an Advisor receives a $10 dividend on a $100 mutual fund holding but happens to purchase an additional $100 that day, many portfolio accounting systems would calculate the return as 5% when clearly it should be 10%. This scenario will distort the TWR return stream from that point forward. Since mutual funds are purchased and redeemed at end-of-day NAV, purchases and sales should always be treated as end-of-day events and not part of the beginning-of-day capital base. WealthSite uses both beginning-of-day and end-of-day flow assumptions depending on transaction type and instrument, and these rules can change per Advisor preferences or be overridden transaction by transaction.
Latest and Multi-Tranche Performance
Latest tranche performance allows for reporting on a continuous holding period. For example, if XYZ mutual fund was held years ago and repurchased recently, we allow the ability to report line-item performance for the latest continuous holding period while including the entire return history in higher-level performance measures. Multi-tranche performance correctly calculates the return when there are gaps in the holding period and applies a consistent approach to any benchmark comparisons. Both of these approaches allow for an apples-to-apples benchmark comparison and proper annualizing of returns.
WealthSite offers after-tax daily TWR and estimated tax liability reporting based on entity-specific federal, state, and local tax rates, legal entity state of residence, instrument type, and issuer state.
Shared and Complex Ownership
WealthSite allows for shared ownership of Entities and Accounts. For example, a Family Limited Partnership may be set up as an Entity or Account and other Entities may own a changing percentage of the FLP from month-to-month or year-to-year. Entity group or partnership ownership of another entity is also supported for complex family structures. WealthSite’s performance reporting handles ownership changes and accurately applies the daily profit and capital base to all owners.
WealthSite supports private investment accounting and reporting for each Advisor firm; capital commitments, capital calls, catch-up fees, distributions, recallable distributions, and return of capital transactions. In-between "official" valuations, WealthSite intelligently auto-adjusts daily valuations based on activity [e.g. if fund’s last official valuation was $100K and a capital call transaction is entered for $10K, reports will automatically bump the reporting valuation to $110K until the next official valuation is provided]. Advisors also have the ability to update valuations or enter bulk transactions for all holders of a fund by providing an estimated performance percent or percent of commitment. The valuations and transactions can be edited one-off as needed or reversed and bulk updated again when an official percent is known. Private equity reporting includes TVPI, DPI, remaining commitment, true IRR, and other industry standard measures.
Private Equity Cash Flow Projections
Advisors with significant commitments to private equity funds require analysis of possible call schedules and distributions to manage future cash flow requirements effectively. WealthSite provides Advisors with the ability to create projected cash flow schedules based upon the type of fund or fund-specific projection tables.
Sharpe Ratio, Sortino Ratio, Alpha, Beta, Pearson correlation, standard deviation, % positive/negative months, max drawdown, TVPI, gross exposure, duration, convexity, and others. WealthSite has the flexibility to add new calculations to its library and make these available to all Advisors.
Accrual of Cash and Variable Rate Bond Funds
WealthSite automatically calculates accrued interest for cash and variable rate funds based on the most recent interest payment, time since previous payment, and average daily quantity held. This method creates an extremely accurate performance on a smooth line as opposed to extreme spikes if holdings are not accrued. The system also accommodates daily variable rates, if available, to do precise calculations of daily earned interest.
Hybrid Asset Allocation & Benchmarking
Asset allocation combines top-down and bottom-up approaches. Most accounts are assigned to a manager and are classified top-down based on the allocation of the manager. Other accounts, typically consisting of multiple mutual funds and ETF’s, are classified bottom-up security by security. Classification for all instruments can be split into multiple categories. Benchmarks can be assigned at various levels, including manager, individual securities and any asset class level.
Rebalancing Tools & Reports
Advisors have the ability to set up an unlimited number of model portfolios and to model actual portfolios against a particular model portfolio or a blend of model portfolios. Views include side-by-side detail of current Managers/Holdings versus proposed allocations and a compliance super view that shows a line item for each Entity with the percentage differences across all allocation categories.
QA reports allow Advisors to check for data integrity and validate performance numbers in advance of presenting reports to Partners and End Clients. Examples include extreme TWR with user-defined tolerance, long-in/long-out mismatches, missing/mismatched accrued interest, reorgs not summing to $0 net flow, TWR proof, IRR proof, missing classifications, and more. Of particular value is a collection of missing / suspicious cost basis reports which identify scenarios where the original cost and original cost date are outside a tolerance of the closing price for a given security. These will also identify probable transfer issues where the cost and cost dates of tax lots going out of an account do not perfectly match the tax lots of the destination account.
Client Billing / Revenue Reporting
Client billing includes custom tiers, flat rates, minimums, flat BPS, average month-end or daily valuations, prior period flow adjustments, ability to apply different billing rates to specific accounts or asset classes on a client-by-client or entity-by-entity basis. WealthSite provides additional tools, including actual/projected revenue, invoice tracking, fee calculator, fee schedule comparison, firm-wide reporting broken out by office/partner with average BPS, fee ranking, AuA ranking, etc. All billing details are saved to your database so that you have a precise history of what assets were included or excluded, what fee schedule was in place at the time of invoice generation, and other specific end-client details.
Report Set Automation
WealthSite supports unlimited report sets, the ability to customize the Table of Contents, PDF bookmarking, page numbering, report parameter overrides, watermarks, electronic approval process, auto-filing to private document folders for each client, the ability to define report set preference per client, and report creation based upon client groups.
Back Office Services
WealthSite can provide daily posting and reconciliation of custodial data for those firms looking to outsource this function. We have direct data feeds setup with the larger firms, and we utilize 3rd party providers for additional data sourcing.