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Performance Reporting: The Final Funnel in Effective Monitoring of OSPs


In the realm of Money Management, the accurate generation of performance returns reports is crucial for the success and reputation of the firm. When outsourcing investment operations support functions to Outsource Service Providers ‘OSP’s, the performance reporting function becomes an essential component of effective oversight. Performance reporting serves as the final funnel in catching any issues that may slip through upstream Key Performance Indicators (KPIs) related to trade execution, settlement, and reconciliation. In this blog post, we will explore the significance of the performance return function as the ultimate checkpoint for monitoring outsourced investment operations and ensuring accuracy, transparency and timeliness.

Comprehensive Oversight with Upstream KPIs

Money Management firms typically establish a range of upstream KPIs to monitor critical aspects of investment operations support, such as trade execution, settlement, and reconciliation. These KPIs provide a framework for tracking and evaluating the operational performance of the OSP. While these upstream KPIs play a vital role, the performance return function acts as the final step in the oversight process, capturing any issues that may have bypassed the earlier checkpoints.

Identifying Inconsistencies and Data Discrepancies:

The performance return function serves as the ultimate checkpoint for identifying inconsistencies and data discrepancies that may have occurred during the investment operations process. While upstream KPIs monitor specific operational aspects, the performance return function consolidates all the data and calculations, allowing for a comprehensive review of the accuracy and integrity of the performance returns. Any discrepancies or irregularities that may have slipped through earlier checks can be detected and addressed at this stage, ensuring data consistency and reliability.

Quality Assurance and Error Mitigation

The performance return function plays a critical role in quality assurance and error mitigation. By meticulously reviewing the performance returns, Money Management firms can ensure that calculations are accurate, benchmarking is conducted correctly, and attribution analysis is properly executed. This final checkpoint allows for thorough error identification and resolution, preventing any inaccuracies from being transmitted to client reports or downstream processes. Effective quality assurance processes within the performance return function provides critical safeguards for the firm – protecting its  reputation and maintaining client trust.

Transparency and Client Trust

Accurate performance reporting, achieved through the performance return function, fosters transparency and builds client trust. Clients rely on the performance returns to assess the performance of their investments and make informed decisions. By meticulously reviewing the performance returns, Money Management firms can provide transparent and accurate reporting to clients, reinforcing their confidence in the investment management process. Transparency in performance reporting strengthens client relationships and enhances the overall client experience. Superior investment analytics enable firms to quantity their proven performance track records – supporting trust and client confidence in their long-term abilities.

Feedback Loop and Continuous Improvement

The performance return function also facilitates a feedback loop and supports continuous improvement efforts. By analyzing the performance returns and comparing them against the upstream KPIs, Money Management firms can identify areas for process optimization and enhancements. Any issues or discrepancies detected in the performance returns can trigger a review of the upstream processes, ensuring that corrective measures are implemented to prevent similar issues in the future. This continuous improvement cycle enhances the overall efficiency and effectiveness of the outsourced investment operations.


In outsourced investment operations support, the performance return function serves as the final checkpoint for monitoring accuracy and transparency. While upstream KPIs focus on trade execution, settlement, and reconciliation, the performance return function consolidates all data, identifies discrepancies, and ensures the accuracy of performance returns. By leveraging this function, Money Management firms strengthen their oversight processes, enhance transparency, and maintain client trust. The performance return function acts as the ultimate safeguard, capturing any issues that may have slipped through upstream KPIs, allowing for prompt resolution and continuous improvement of the outsourced investment operations.

As a seasoned senior portfolio manager stated “superior analytics exposes bad data” – it’s critical to include validation of historical performance data from the outset of a planned conversion.


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