Technology & AI
Why your numbers do not match
Two systems, same account, different answer. It is one of five causes and it is usually the second one.
Published
Different valuation dates
One system priced at the close, the other at a different cut-off, or one includes a trade that has not settled in the other.
Check this first. It resolves a surprising share of discrepancies and takes two minutes.
Different return methodology
Time-weighted and money-weighted returns answer different questions and produce different numbers from identical data. If one system defaults to one and the other to the other, they will never agree, and neither is wrong.
This is the most common cause and the one that generates the longest arguments.
Different fee treatment
Gross of fees in one place, net in another. Or fees accrued in one and deducted when paid in the other. See performance reporting.
Different account membership
A household defined differently in two systems. One includes a closed account, an outside holding, or a spouse’s account that the other does not.
Accrued income
Whether dividends and interest are recognized when declared or when received. Small, persistent, and maddening to track down.
Nobody is wrong. Two systems are answering slightly different questions, and neither of them says which question it answered.
The real problem is not the discrepancy
It is being asked which number is right, by a client, live, and not knowing.
That moment costs more trust than the underlying difference ever justifies.
The fix
Decide which system is the record for client-facing performance and use only that one with clients. Document the methodology it uses. Reconcile the others against it on a schedule rather than in the moment.
Firms that run two client-facing reporting systems eventually stop. The only variable is how uncomfortable the conversation is that makes them stop.