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Poll exposes inaccurate portfolio valuations, asset and exposure tracking errors

Over 60 per cent of firms admit that data reconciliation errors impact the accuracy of their portfolio valuations, while 53 per cent state that daily tracking of assets and exposures occur with errors, according to the results of a poll by SimCorp.

Surveying over 50 executives from almost 30 major buy-side firms across North America, the SimCorp poll revealed that 63 per cent of firms experience data reconciliation errors that impact the accuracy of their portfolio values.

Additionally, more than half of respondents stated that tracking and reporting on assets and exposures occurs with errors.

“If a fund manager has to correct a NAV price due to the wrong portfolio value, it is very damaging to the firm’s reputation,” says David Kubersky, managing director, SimCorp North America. “For other buy-side organisations, inaccurate portfolio valuations lead to poor investment decisions and deplete investor confidence. At the heart of these failures is a disparate system landscape and fragmented position-keeping. This is why SimCorp’s technology approach is built on centralised position-keeping across the entire portfolio for an authoritative source of the ‘truth’ from which investment decisions can be made with peace of mind.”

In light of these challenges, the majority of firms surveyed do have plans to evaluate and make technology changes in the back-office, with 63 per cent citing investment in improvements within a two-year timeline. However a significant 35 per cent of respondents stated that they have no plans to modernise their back-office infrastructure in the near future.

Kubersky says: “Our question to investors is: do you want the 35 per cent who have zero plans to upgrade their infrastructure to manage your investments?”

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