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How the mighty has fallen

| Once upon a time in a galaxy far, far away, Quicken was looked upon as a godsend for those wanting to manage their finances on their computers. No more.

A bit of background: Many, many years ago I started using Quicken to keep track of my finances. It wasn't great but for the most part it worked. But as the years went by, Intuit added more and more frippery to the program, increasing the complexity and, often, decreasing reliability and usability. At one point I became disgusted and tried Moneydance, but it had some critical shortcomings. I switched to Microsoft Money, which it turned out I liked a lot. Alas, Microsoft dropped Money, and I switched back to Quicken.

Now, however, Quicken has shot to the top of my list of Software-That-Is-Just-A-Pile-Of-Crap.

Long-standing grievances

Placeholders. Every now and then an investment will change its name. The simple thing to do would be to simply change the name of the security in Quicken's database. But no. What Quicken does is (a) "remove" all the shares under the old name and (b) "add" a "placeholder" for the total number of shares under the new name. It then wants you to supply the cost basis for all the shares under the new name. This is tantamount to recreating the entire transaction history that Quicken has just obliterated.

No export. Quicken keeps everything in a database. But what makes Quicken particularly pernicious is that it will not let you export the data for investments. For a checking account, yes, but for your investments, no. This has the practical effect of locking you forever into Quicken or going to the tedious and error-prone trouble of re-entering the data manually,

Cash management account

Almost all of my retirement funds are in a Fidelity IRA, and lately they have been touting the benefits of a no-fee Cash Management Account (CMA) that is functionally equivalent to a checking account at a bank. I decided to take a look with the idea that perhaps I could simplify by jettisoning my bank checking account.

Fidelity video for Cash Management Account
Watch the promotional video

With the CMA you get an ATM/Debit card, check writing, bill pay, and check deposit via your smart phone, all with no fees. Any ATM fees imposed by banks are reimbursed. What's not to like? I signed up, ordered my checks, got my debit card. Then I added a Fidelity American Express card that has the benefit of rebating 2% of all purchases into the CMA. Again, what's not to like?

Cash management account features

Now the two threads of our story come together: I tried to add my new CMA to my Quicken banking file, and that's what the insanity began.

Although the CMA is functionally equivalent to a checking account, Quicken insisted that it must add the account as a brokerage account

I supplied the proper username and password to Quicken so it could download from my new account. Surprise! When you tell Quicken to download the CMA it downloads all the accounts at Fidelity. Since I keep separate data files for banking and for investing, this gives me two copies of my IRA account in different files plus two "accounts" in Quicken to represent my CMA. Oh, joy!

All of this might be tolerable, but take a look at what Quicken puts into those accounts:

Brokerage account

brokerage account

Quicken register for the CMA "brokerage account"

The column headings are those you would expect for an investment account - those related to the buying and selling of shares and a share balance. It correctly shows that I seeded the acccount with $700 transferred from my IRA account. But what it did with that $700 is buy 700 shares of a security at Goldman Sachs!

But since you cannot change those headings, you will be hard pressed to record spending $71.37 for groceries at Stater Bros. What the Quicken register does show is the sale of 71.37 shares of the Goldman Sachs security to pay for the groceries at Stater Bros.

Now, what both Fidelity and Quicken say is that after adding the CMA as a brokerage account, you should check the box to associate a cash account with the CMA brokerage account. This "cash" account will let you record your spending with familiar headings. Yeah, right!

Cash account

brokerage account

Quicken register for the CMA "cash account"

The $700 seed money is reflected in the cash account, along with the purchase of those shares of Goldman Sachs. But buying those shares makes the balance of the cash account $0! And spending $71.37 for groceries at Stater Bros is paid for by selling 71.37 of those Goldman Sachs shares, again resulting in a balance of $0!

So, if I want to use the CMA for bill paying or checking or ATM withdrawals, I have to look at the "brokerage account" to see how much money I have left, translating 1 share = $1. And if I want to see where the money went, I have to look at the "cash account" and ignore all the buying and selling of phantom Goldman Sachs securities.

Maybe there's someone somewhere who thinks this is how a checking account should work, but it's not me.

And by the way, a Fidelity Cash Management Account Representative told me that the money never actually leaves Fidelity, but it's registered as a Goldman Sachs security (or one of several other investment banks) in order to get FDIC insurance on the money. I call that "funny money."

I don't think so

The prospect of using the CMA as a substitute for my bank checking account, updated online via Quicken, is unthinkable.I suppose if I were willing to rely just on the Fidelity website, that just shows deposits and spending without all the behind-the-scenes machinations, it might be OK. But then when it comes tax time, there will be hell to pay trying to compile the various numbers needed to file.

Silver lining

There is a silver lining in all this: the Fidelity American Express card. As a reward for using it, 2% of all purchases is rebated back into my CMA. I've decided to use it for any and all spending that I would have otherwise paid for with my debit card or a check. I might as well get some compensation for having endured this foofaraw.

One more thing

The version of Quicken that I have is the 2012 edition. I see no reason to simply lard the Intuit coffers by upgrading every year when all they do is add features and complexity that are superfluous to me. But come March of 2015, Intuit will turn off the online features of Quicken 2012. Therefore, anybody who still uses this edition and wants to continue updating their accounts online will have to upgrade to a new Quicken edition. For a price, of course.

Last updated on Apr 13, 2018



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