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

by Doug Morris, CEO, Sharesight

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.

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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.