Xcitek LLC has launched a product that it says will help brokers and advisors respond to client requests for cost basis information. While these requests are a year-round burden, they are especially heavy during the tax season, says Xcitek, causing some firms to increase staff at call centres and branch offices in order to handle the inquiry volume.
The new Client Cost Basis service enables investors to calculate their own cost basis using Xcitek’s proprietary Cost Basis Calculator located as a customized tool on the broker or advisor’s website. The investor enters minimal information to get a bottom-line calculation that factors-in all splits, spin-offs, distributions, mergers and other cost basis affecting corporate actions. This user-friendly calculator can handle equity positions initiated as far back as 1900 as well as the effects of Dividend Reinvestment Plans.
Xcitek Client Cost Basis evolved out of Xcitek’s Cost Basis Service (XCB), introduced in 2000. XCB supplies financial institutions with value-added data, such as allocation factors and tax opinion, stemming from corporate actions that have cost allocation and tax status consequences. The Cost Basis Calculator, already available to XCB clients, automatically computes the adjusted cost basis of any position taking into account all splits, spin-offs, distributions and other cost basis-affecting corporate actions.
“No institution maintains cost basis on 100% of the positions in client accounts. Even where the effort has been made, positions transferred-in or pre-dating the cost basis effort, rarely have the required information,” says Joseph M. Carvalhido, Managing Partner at Xcitek LLC. “And that’s a ‘best-case’ scenario. Far more typical is the institution that only tracks cost basis for the top tier of its clients through the use of portfolio accounting software. That leaves the vast majority of clients without access to this critical information, and the task of researching the position falls to the broker or advisor. Not only does this product make the research easy, but it goes to the next step of enabling the client to do it themselves.”