Reconciliation

Reconciliation is the daily process of matching a firm's records of holdings and transactions against the custodian's records. Positions, share counts, prices, and cash balances are compared line by line, and any break is flagged for review before it can distort downstream numbers.

Advisors and their operations teams reconcile because everything else depends on it: performance reporting, billing, rebalancing, and client statements are only as trustworthy as the data beneath them. An unreconciled portfolio can show the wrong return or generate an incorrect fee.

Reconciliation is a core, often unglamorous function of portfolio management software, which ingests overnight custodial feeds and auto-matches the bulk of activity so staff review only exceptions.

Typical breaks that reconciliation catches include:

• Missing or duplicate transactions in a custodial feed
• Price or share-count mismatches between systems
• Unposted corporate actions such as splits or dividends

Because it feeds performance attribution and fee billing, reconciliation is the quiet foundation of a clean book of business.