Why do accountants love Sharesight? (hint: it’s not because they’re pretending to be portfolio managers)

Our Partner Edition, Sharesight Pro has been live for just over a year. We built it because we had accounting firms using our original, DIY product and asking for more features. Most of what’s available is a direct result of their input. Adoption has been terrific amongst all sorts of accountants and more recently, wealth managers. And since we were named Xero’s Add-On Partner of the Year, collecting feedback from our clients and building what they ask for is a strategy we’ll stick with.

Why do accountants love Sharesight?

The Sharesight Pro client base runs the gamut from two-partner practices on the South Island to the international “Big 4″ (proud to say all four as a matter of fact). These early adopters are businesses who’ve moved into the cloud, whose clients have referred them to Sharesight, or accountants who happen to be investors themselves.

Since the commitment it takes to become a Sharesight Partner is minimal ($60 per month), we have the benefit of watching firms as they join our ecosystem and grow. The main reason partners say they’re satisfied? Time saved. But we’ve noticed a few more trends and common questions as we’ve grown:

Sharesight is not a database (except when you want it to be)

Accounting firms are conditioned to think of investment data in terms of one, hulking, monolithic database versus a “live” portfolio. This is due to how financial data has been sold historically. Super expensive enterprise software, which must be downloaded and manually updated, was the only way to access historical share prices, dividends, and corporate actions. Practices had to buy the database and then work out how many access licenses were required. When doing portfolio accounting work under this regime, staff members must work out point-to-point performance calculations by querying this database and then working out the capital gains and distribution implications — on a holding-by-holding basis. The only time the data is current is on the day the work is done: the portfolio moves on, the database does not.

Having broad access to this mass of data is great if you’re working on a PhD in quantitative analysis. Otherwise, 99% of the data purchased goes to waste. This is a great business model if you sell the content, but terribly expensive if you’re doing once-per-year tax prep.

Powerful Data

In reality a portfolio is an ever-changing entity, which updates at the close of trading every day. We believe that tracking a client’s transactions as they occur is the most effective approach. We’ve already bought the hulking, monolithic database on you behalf. We track when your clients make trades or receive dividends, and “ping” the database to create an ongoing timeline of investment history. This achieves two things at once: an automated record-keeping solution, and up-to-date performance and tax positioning.

With all that in mind, our partners are still able to leverage the historical data we’ve licensed. Each partner account has access to a Demo portfolio, which can be used to go back in time. Need 20 years of dividends for CBA? Just enter a trade and export the Taxable Income report. We’ve also built the Share Checker, which lets you run hypothetical trades across our database, over any time period.

So what does my client need to do?

Nothing, something, or everything. The degree to which an accountant involves clients is up to each firm. The beauty of the cloud ecosystem is that it relies on client engagement to really hum. We land on the side of an informed client being a happy client.

Share Access

If you have clients who are hands-on investors, our encouragement is to give them Read & Write access so they can import their portfolios from their broker. This allows them to dictate how much trading history is added to Sharesight. They manage the portfolio from an investing standpoint, and the accountant manages the portfolio from a tax minimisation standpoint. On the other hand, if your client only holds a few shares and relies on your expertise, you may decide to just generate tax-time reports without sharing access at all.

If you do share access to a portfolio with your client, they can see everything that you can (but can’t necessarily edit data). For some accountants and financial advisers, this takes some getting used to. Apart from portfolio setup, there’s very little on-going admin work to be done. While this may jeopardise a one-off fee for administrative services, we’d argue that it strengthens the relationship long-term. A strategic tax planning discussion is a lot more valuable than a tax retrospective.

Cost

Regardless of the use case, an entity costs $144 per annum via our Partner Edition, and becomes less expensive once volume thresholds are reached. That $144 gives you unlimited reign across our 20 years of historical data, unlimited holdings, unlimited portfolio value, and unlimited sharing with clients and staff. And we offer training and setup too. We don’t get bogged down in pricing discussions as most people quickly work out how to absorb that cost — time saved setting up historical data being reason enough to join.

Sharesight Value

Every once in a while we have a tyre-kicker challenge us on cost. Normally it’s because they haven’t tried to do anything meaningful with the product. Often these trial runs consist of someone adding 1 holding, bought last week. This means you can’t run any meaningful reports. And when you don’t leverage the historical data available, or the fact that Sharesight listens for trades in the future, that doesn’t make for a very exciting experience! And that’s the beauty of Sharesight, once setup, it takes care of the rest for you.

Don’t wait until markets tumble to track your investments

Global sharemarkets have fallen 5% in the past month. But when markets tank we notice a surge in new clients at Sharesight. Based on the analytics behind what drives people to sign up, investors rush to pinpoint their investment positions. They find what they need from the share registries and then sign up with us to import trading histories from their brokers. While it’s encouraging that people are taking steps to become informed investors, it also tells us that many of them don’t know where they stand.

EEM

So many investors don’t know when they bought shares, how many they own, or at what price they acquired them. That’s fine during rising markets, but if you’re in negative territory you need to get a handle on what your losses look like. (And while we hate falling markets just as much as you – if we’re not on the hunt for value picks – they do expose some of the reasons behind our fantastic growth.)

The first ever Sharesight client signed up in late 2007, with early adopters coming on board version 1.0 in 2008, right into the teeth of the GFC. Launching a portfolio tracking application during a global economic meltdown may have sounded bananas to some, but it suited us just fine. Providing an alternative to expensive platforms or wraps while giving investors control of their portfolios is what we’re all about. And while Sharesight is superb at tracking your on-going performance for performance and tax purposes, you could argue that there’s just as much value in going back in time to work out where you stand today. Ultimately, Sharesight provides the peace of mind of knowing that your investment data resides in one place, while providing powerful performance and tax reports at the ready. Markets will inevitably fluctuate, but having a clear view of your investment position helps to mitigate your worries, while proving the crucial data you need to make key buy/sell decisions.

What is automation worth to you?

A theme at a recent roundtable we participated in was the cost/benefit of switching to the cloud, known as “going Xero” within certain circles. Not a chat about the security of your selfies, mind you, but about what a business gains or loses by overhauling their day-to-day workflow. The benefits of cloud are obvious if you’re reading this blog. It’s the pain of change that remains a barrier, and the psychological block we all have when it comes to sacrificing something that works for an unknown that’s probably better.

We’re guilty of this at Sharesight. For example, tracking sales and expenses within specific countries and then rolling this up to top line numbers is hard. Especially because our product is virtual. We use Xero to do some of this, but the job is really done in Excel. We know this isn’t ideal, but at the same time it’s what we’re used to. We’ve investigated apps that work with Xero to do this on our behalf. They work brilliantly, but we just haven’t quite made the switch.

What is automation worth to you?

We see this with Sharesight clients too, especially those who’ve tracked their portfolios the old-school way for years. There’s a perverse satisfaction to keeping tabs on your capital gains and dividends in an Excel spreadsheet. Punching in data by hand reconfirms a genius stock pick after all! Even after they’ve begun using Sharesight, some clients ask us to build features that are already being done for them. You’d be surprised at how many people ask for tools that would basically allow them to reengineer the Portfolio Overview page or the Performance Report.

A lot of this boils down to the fact that a spreadsheet is a snapshot in time. A statement of your portfolio’s position as at the moment you click “Save,” whereas with Sharesight you’re looking at your living, breathing portfolio each time you log in. Contract notes pile in automatically and the performance calculations are done on your behalf. Sure you can export reports to Excel and file them away, but why not just send your accountant a login? We’ve slayed the admin beast for you, and all of a sudden you have Sunday afternoon back. A client recently told us that working out his portfolio tax used to take him 4 hours. Now it takes him 40 minutes.

 

 

And that’s what “going cloud” is all about: time savings. If Xero, Sharesight, or Receipt Bank can automate 90% of what used to take hours, then take the plunge. Even if using Xero + Sharesight + a collection of other applications increases your operating costs, think about what you can do with those free hours.

Make no mistake, automation that works is something worth paying for. Applications that are free or just a $1 per month probably aren’t going to solve your problems, nor will they be around long-term. And what happens to your data after they disappear? For investors, Sharesight costs $275 per year. That’s $275 for 20 years of historical price and dividend data across global markets, a service that listens for your trades, and runs you performance and tax automatically across 3 portfolios. We think that represents excellent value.

No app will be a silver bullet, but you must force yourself to think about what you’ll do with your refund on time.

Announcing ASX mFund: Now available on Sharesight

We’re excited to announce that mFunds are now available on Sharesight. We’ve worked with the ASX to incorporate mFund data, which means we’re now receiving daily, automatic updates across their entire range of investments – just like any tradable security. And this means that you can begin tracking your mFund holdings in your portfolio since brokers are already offering mFund execution.

ASX mFund

It’s exciting to be at the forefront of what should be a huge win for DIY and professional investors: direct, low cost access to a range of local and overseas fund managers. This translates to one-click diversification and portfolios that are less exposed to local banks, houses, resource companies and as a result, China.

Australia boasts one of the largest and most active investor populations on planet Earth, but until now managed funds haven’t played a direct role in this, which is a shame. In other markets, such as the US, managed (mutual) funds are strongly associated with responsible, self-directed nest-egg-builders. In fact Fidelity, a fund manager, has morphed itself into one of the country’s largest online brokers as a result.

In Australia we have compulsory superannuation, which is a great policy on paper. However, this results in a lazy relationship between households and the fund managers looking after their savings. People are locked-in contributing their 9.5%, while the fund managers are content with guaranteed inflows of cash. There’s been little reason for anyone to question fees, asset allocation, or learn about managed funds – but technology and the rise of self-managed superannuation will disrupt this codified framework.

mFund will be a win for financial advisers too and should help distance those who are truly adding value from those who’ve relied on commissions from product manufacturers. Those looking out for the interests of their clients will have a hard time not using mFund due to their low cost and pricing transparency. Many advisers are already pivoting their businesses to account for this, and are on the hunt for portfolio reporting and administration alternatives to platforms and wraps. Enter Sharesight. If an adviser no longer relies on a platform for fund execution, then there’s no way to justify their high fees for portfolio admin alone.

In a country where retail (and even wholesale) consumers get screwed on price for the same product sold overseas (the ridiculous markup on digital music or trainers just to cite a couple of examples) it’s a welcome development to see an institution as reputable as the ASX step in to look out for the interest of investors. We live in a world where large institutions are trying to unlock value by forming direct relationships with their end clients. Investors should stand to win if an arbiter like the ASX acts as the conduit between them and the world’s leading fund managers.

New Features: Custom groupings, display options, more chart improvements

We recently released improvements to our charting package, and hinted at more improvements to come regarding analytics and display options. Today, we released three additional features: custom groupings, the ability to display your returns in dollars or percentage throughout the application, and even more improvements to charting.

Custom Groups

Many of you asked for options around how to display your portfolio holdings. Previously, our (locked) default was by market participation. Now you have a choice between: Market, Industry Classification (GICs), Investment Type, Country, or a Do Not Group option.

Sharesight Custom Grouping

This setting can be found in the “Advanced Options” menu, which is new. We’ve added a link to this menu on the Portfolio Overview page and on all of the Reports pages. Once you’ve made your selection, click “Apply”, and your grouping of choice will be carried throughout the application – from the home page to the reports. This setting will also change the groupings of the charts. We think these five options are a good start, but expect more in this area later in 2014.

Sharesight Charting Improvements

Performance Display Options

While we’ve always allowed you to display figures in dollars or percentage, this was limited to certain parts of the application and didn’t carry through the entire product. And it required a refreshing or reloading of any page where you made a change. We’ve greatly improved this by adding a “$/%” toggle button in the heading of every data table on Sharesight. Plus, we do the calculations for both settings behind the scenes, which means there’s no delay when you switch back and forth.

Sharesight - Performance Display Options

Further Charting Improvements

We’ve also made two minor improvements to charting on the Portfolio Overview page which will save you time. We’ve moved the chart type drop-down menu to the left side of the page so it’s grouped with the other display option settings. And we’ve eliminated the “Go” button. Now when you make a change to any setting the change will be applied immediately. Less clicks = better experience!

Sharesight - Charting Improvements