Cost Basis Reporting Technology: Tools for Easing Requirements and Enhancing Existing Functionality

by Alexander Camargo, March 21, 2012
Vendor Reviews
North America

Abstract

Cost basis reporting continues to be a focus for brokers and technology vendors. As challenges continue to mount, new tools have entered the space. These tools are not positioned as full cost basis reporting solutions, but instead target specific pain points in the cost basis reporting requirements.

In a new report, Cost Basis Reporting Technology: Tools for Easing Requirements and Enhancing Existing Functionality, Celent provides a follow-up to The Cost Basis Reporting Vendor Landscape 2011. Whereas the previous report compares full cost basis reporting solutions in the North American market, this report focuses on tools that address targeted aspects of compliance requirements for tracking and reporting cost basis.

“There are still challenges around calculating cost basis. One area that has gained a lot of attention has been corporate actions tracking and adjustments,” says Alexander Camargo, Analyst with Celent’s Securities & Investments group and the author of the report. “Adjusting for corporate actions requires extensive databases and the ability to track the origin of a security. Many brokerages are looking for solution providers to aid in corporate actions cost basis adjustments. Additionally, existing providers looking to enhance their services can supplement their solution by partnering with providers that have extensive corporate actions experience.”

This report will provide several examples of providers who are offering tools in the space to enhance broker offerings around cost basis reporting. The vendors featured in the report are: Interactive Data Corporation, NetWorth Services, and Wolters Kluwer Financial Services.

Celent has also identified integration between systems as a major challenge in cost basis reporting. In order to showcase these challenges, Celent has highlighted the steps that Fiserv has taken to ensure proper integration and reconciliation between systems.
This report explores specific challenges in the cost basis reporting market and provides examples as to how specific vendors are addressing these challenges with targeted tools. This will provide financial services firms and other technology providers with valuable use case scenarios.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

4

Continuing Challenges in the Cost Basis Market

5

 

Who Will Use Cost Basis Tools?

6

Corporate Actions Basis Tracking and Calculations

7

 

Interactive Data Corporation

7

 

NetWorth Services

10

 

Wolters Kluwer Financial Services

11

Cost Basis Integration Challenges

14

 

Case Study: Fiserv Tackles Reconciling and Integrating Systems

15

Conclusions

17

Leveraging Celent’s Expertise

18

 

Support for Financial Institutions

18

 

Support for Vendors

18

Related Celent Research

19

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