To maximize market exposure, fund managers leverage multiple fund administration platforms to offer a diverse array of investment opportunities. In the face of a volatile and ever-changing market, new insights and investment research emerge regularly. Discretionary fund managers must proactively adjust asset and fund allocations, swaps, and trades to align with each client’s risk profile, aiming to maximize returns and mitigate risk. To streamline these processes, fund managers seek ways to automate portfolio reconciliation, to ensure that all transactions and positions are accurately tracked and reconciled across different platforms.

Accurate representation of client investment positions across all fund administration platforms necessitates periodic rebalancing of model portfolios. This rebalancing ensures the portfolios reflect the current investment strategy. Failure to execute this process timely and accurately can result in significant financial repercussions for fund managers and increased risk for their clients.

Manual Portfolio Reconciliation Issues

Manual portfolio reconciliation subjects operational teams to undue stress and other problems. Discretionary fund managers who rely on this approach expose themselves to significant risks that could be mitigated through the use of technology. When firms attempt to handle this process manually, they encounter several issues, such as:

• Data Discrepancies: Differences in data between systems can arise due to timing issues, data entry errors, or differing data sources. These discrepancies can lead to inaccurate reporting and decision-making.
• Human Error: Traditional reconciliation often involves manual data entry and comparison, which is time-consuming and prone to human error. This can lead to inefficiencies and increased operational costs.
• Complexity of Transactions: Financial transactions can be highly complex, involving multiple parties, instruments, and currencies. This complexity can make reconciliation challenging and resource-intensive.
• Frequency of Reconciliation: Regular and frequent reconciliation is necessary to maintain accurate records, but this can be a significant burden on resources, especially if the process is not automated.
• Multiple Systems: Using multiple, disconnected systems for different aspects of fund management can create silos of data that need to be reconciled, increasing the risk of errors and inefficiencies.
• Regulatory Compliance: Ensuring compliance with regulatory requirements adds an additional layer of complexity to the reconciliation process. Accurate and timely reconciliation is critical for meeting these obligations.
• Timeliness: Delays in reconciliation can lead to outdated or incorrect information being used for decision-making, potentially resulting in financial losses or missed opportunities.
• Cost: The process of reconciling portfolios can be costly in terms of time, labor, and resources. This can impact the overall efficiency and profitability of fund management operations.
• Scalability: As the volume of transactions increases, the reconciliation process can become more cumbersome and difficult to scale without automated solutions.
• Accuracy and Precision: Achieving 100% accuracy is crucial for maintaining trust and ensuring sound financial decisions. Manual and semi-automated processes may struggle to achieve the required level of precision.

Eliminate the Need to Automate Portfolio Reconciliation Altogether

Typically, financial operations involve using multiple software solutions for different functions, such as accounting, portfolio management, and reporting. These separate systems often store data in different formats and structures, requiring regular reconciliation to ensure that the information matches across all platforms. This process involves manually comparing and adjusting data, which can be time-consuming and prone to errors.

Additionally, integrating these various systems to allow for seamless data transfer and comprehensive analysis can be complex and resource-intensive. It usually requires custom software development or third-party integration tools, which can introduce further complications and maintenance requirements. FundCount was designed to address exactly this.

A unified structure ensures that data remains consistent and accurate across all modules

FundCount’s unified platform addresses this by removing the need for reconciliation and integration work efforts between modules and associated limitations in speed, accuracy and data insights. This means that data entered into the platform is immediately available for all functions, simply eliminating the need for separate data reconciliation processes. A unified structure ensures that data remains consistent and accurate across all modules, as there is no need to transfer data between different systems. This approach simplifies the workflow, reduces the potential for errors, and enhances the speed at which financial data can be processed and analyzed.