A wealth report is only as good as the data beneath it. Reconciliation is the step that makes sure that data is right. It is unglamorous, easily postponed and the reason some reports build trust while others trigger questions.
What is matched
Positions: do holdings per security match the custodian statement? Cash: do account balances match? Transactions: are all purchases, sales, income and fees recorded, and none twice? Prices and FX rates: is there a price for each valuation date, and is it current? With several banks, mapping is added: the same security can carry different names.
Typical breaks
Missing FX rates that value a foreign-currency position at zero or an old rate. Stale valuations, especially for non-bankable assets. Transactions imported twice when the same movement arrives via a file and a feed. Corporate actions such as splits or mergers processed in one system but not the other. And feed failures, where a delivery simply does not arrive.
Prioritise by severity
Not every difference matters equally. A missing price for a heavily weighted position distorts total wealth; a rounding difference on fees does not. Sensible reconciliation sorts breaks by impact and resolves the serious ones first, before a report is sent or an asset-based fee invoiced.
Data quality as a compliance issue
Wrong figures are not just a reporting problem. Fees calculated on assets under management are invoiced wrongly. Tax documents inherit the errors. And plausibility checks on the source of funds need complete transactions. Reconciliation therefore belongs documented with an audit trail: what was checked, which differences existed and how they were resolved.
Rhythm
How often to reconcile depends on activity and ambition: daily for actively managed accounts, at least monthly before every report. More important than frequency is follow-through: an open break is pursued until resolved, not rediscovered next month. Realised gains additionally require clean tax-lot accounting based on complete transactions.