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For investment operations managers, performance reporting is where the rubber meets the road.
It's the tangible results of the firm’s investment decisions, and these results will be shared with their client.
High-quality performance reports are key to maintaining client trust... and your own peace of mind!
Below are the best practices for making sure what ends up on your client reports from your portfolio accounting system is both pristine and accurate.
The portfolio manager is the best source for understanding expected performance. They select the securities driving most of the returns.
Before generating reports, discuss anticipated performance relative to the benchmark with the portfolio manager. This provides a good estimate of the IRR for the period.
This proactive step saves you from scrambling later when the PM says, "the performance looks wrong." You can investigate potential discrepancies during the reporting process and clearly communicate any differences to the portfolio manager.
This one sounds basic, and it is. But it's remarkable how often it doesn't happen.
Unfortunately, not all portfolio accounting systems have robust tools for data accuracy.
Millions of data points exist within these systems, and even a single error can erode trust if it reaches a client's report.
There are two approaches you can take: you can 1) build the system yourself or 2) partner with a firm like Empaxis that provides investment managers with the QA reporting tools they need.
If developing your own QA system isn't feasible, partner with investment performance reporting and quality assurance experts like Empaxis.
Our proprietary QA system, custom-designed for investment performance reporting, enables:
Empaxis QA systems integrate with your existing software and data sets, configured to track quality according to your specific definitions.
In recent years, AI-assisted anomaly detection has moved from "interesting pilot" to practical, deployed tool at firms of all sizes.
What does that look like in practice? Rather than simply flagging that a number is missing, AI-driven QA tools can now identify patterns. For example, if returns for a specific security class have been consistently off by a small margin across three consecutive reporting periods, that points to a systematic data feed issue rather than a one-off error.
Tools like these don't replace your QA process; they make it faster to find what matters. A rule-based system catches what it's programmed to catch. A well-trained model catches what it should catch but nobody thought to write a rule for.
When evaluating QA tools, ask vendors specifically about anomaly detection capabilities, not just validation checks.
Data coming in from custodians arrives at different times based on when the custodian delivers it.
Batch your work by the availability of the statements. Some custodians provide statements earlier in the month than others. Establish reporting delivery dates based around the availability of these statements.
For example, use the 5th, 7th, and 15th business days. This allows you to get out the reports for clients with accounts at the early custodians first and later ones after. This also sets expectations internally about when to expect the reports to be ready.
Many operations managers avoid hard commitments. However, at Empaxis, we believe commitments drive better service and provide benchmarks for comparison.
Even without set client delivery times, establish internal deadlines and track your adherence. As Peter Drucker said, "You can't manage what you don't measure."
Measuring back-office performance against service levels can motivate your team. You can compare performance month-over-month or quarter-over-quarter. In today's remote and hybrid work environments, employee engagement is vital. Regular communication and performance tracking are key.
Measuring on-time performance, turnaround time, and error rates reveals your consistency. High variability in processing likely indicates an inconsistent client experience.
Performance reporting usually happens on a quarterly basis. Get it wrong only one quarter and your "grade" goes from an A+ (100%) to a C (75%).
If you only have one person who can do this job well, that's a lot of risk when reporting time comes around. You need to train and test multiple backups who can do the work.
The key word is testing. If you train someone today and then don't have them do the process for six months, is it rational to think they'll perform flawlessly?
Have your people swap reporting assignments every other quarter. Ideally you have a team where anyone can perform at the level of the primary person responsible for the account.
People leave, get sick, get married, go on vacation... some of these you can plan for, most you can't. Do not let absenteeism adversely affect your most important deliverable.
If finding and training backups takes too much time, then it is worth looking at performance reporting specialists like Empaxis, who have the technology and backup resources to ensure reports get done accurately.
The investment management industry has always changed fast, but the pace of change in reporting tools has accelerated meaningfully over the past two years. Staying ahead doesn't mean adopting every new tool; it means knowing which ones actually move the needle.
Data collection, validation, and formatting are still the biggest time sinks for most operations teams. Automating these steps reduces errors and frees your team to do higher-value work: reviewing outputs, communicating with PMs, and handling the edge cases that no system handles well.
Connect your portfolio accounting system with other critical systems — your CRM, data warehouse, or client portal — to ensure data consistency and reduce manual handoffs. Every manual step is a place where errors enter.
Generative AI is now a practical tool for performance reporting, but the useful applications are specific. Here's what's working in practice at operations teams right now:
What AI does not reliably do well yet is replace human judgment. Deciding whether a discrepancy is a real error or an expected deviation based on what you know about a specific client's portfolio and mandate... that's still a human call. Use AI to move faster, not to remove accountability.
For operations managers, providing clients and internal staff with high-quality performance reports is an essential part of the job. It can be a high-stress part of the work, as there are a lot of people reviewing the information, and having the right technology and a reliable, qualified team to run the reports goes a long way.
The fundamentals haven't changed: communicate early with your PMs, build a real QA process, set and track internal service levels, and cross-train your team. The tools available to support those fundamentals are better than ever.
Following these best practices will help you produce a high-quality result and perform more consistently — quarter after quarter.
Empaxis has 20+ years of experience focused on the middle- and back-office, with a team of performance reporting and portfolio accounting specialists ready to support your operations. Click here to schedule a complimentary consultation.
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