Ripsaw® uses multiple good sources for security data. However, there is no perfection. We must anticipate that there will be situations from time to time in which pieces of data are not available, misclassified or erroneous. Ripsaw® has a data override function for this purpose to make corrections and maintain them. Ripsaw also has Data Quality alerts to let you know about data issues and where to fix them. Typical needs for a data override are relatively simple. The following example illustrates the flexibility of Ripsaw® to handle a complex financial instrument with good judgement.
The first place to look for a potential data error is in the dashboard aggregation in Net Worth or Investments mode. If either aggregation of Real, Cash, Bonds and Stocks is less than 100%, than one or more securities in your wealth portfolio is missing a sector allocation. Furthermore, each security or fund allocation across sectors must also sum up to 100%.
John and Jane Saw’s wealth portfolio does not sum up to 100%.
There is more than one way to find missing or incorrect data.
Ripsaw® Data Quality Alerts check your accounts for data issues whenever you log in. To see your alerts, go to the Notifications icon. Choose See All and then select Data Quality Alerts for a list of investments that need attention.
John Saw’s work-related retirement plan notification indicates an absence of any cash, bond or stock allocation.
In this case TIAA is not providing sufficient information to our data partners. The reason may be the difficulty in classifying its characteristics. The interest rate is contract specific depending on when it was originated. There is a guaranteed minimum rate. In retirement, you can purchase a lifetime annuity, elect a 10-year cash out or choose the required minimum distribution.
After clicking on data override, the Descriptive Information section of his TIAA Traditional Annuity opens.
This investment is best categorized as a 100% bond allocation. They look up John’s account online to find that the current yield is 4.25% and enter that for both SEC and TTM yield types.
Next, they click on Bond Details. They Google information about TIAA and make some reasonable best-fit assumptions for the allocation in the Bond Global, Credit Quality, Maturity Range and Sector distributions.
The entries for the Maturity Range Distribution is dependent on their retirement horizon and intended method of cash withdrawals. At age 35, assuming retirement at 65 and 20 years of retirement, that person might view this as a 50-year variable rate bond investment that is paying out in the last 20 years. A 72-year-old receiving the required minimum distribution and a younger surviving spouse, might consider the contract as a 30-year variable rate interest only bond. John and Jane input their expectations for receiving cash benefits beginning 25 years from now.
After saving the data entries, the wealth portfolio dashboard Investments and Net Worth modes now sum to 100%.
Using the information drop down menu, select Bond Details. Then scroll across the TIAA Retirement Plan account to observe the override entries that are now available for aggregation into the dashboard.
An alternative to using notifications, is to open each account and see if any override icon in the far-left column is highlighted in red. If so, click on it, fill in the missing or incorrect information and save.
Click on the Charles Schwab Rollover IRA account to open it and then on the red override icon for Great Lakes Aviation. After filling in any relevant Descriptive Information, Select Stock Details to see the absence of information available on this very small company. Fill in the details and Save.
From the information drop down menu, choose Stock Details. Then scroll across the investment in Great Lakes Aviation to see the overrides that will be used by the wealth portfolio dashboard.
After reviewing all accounts for red override icons and making appropriate changes, you are ready for portfolio construction, monitoring and revision.