Selecting the right middle office provider isn’t just about outsourcing operations; it’s about choosing a partner who will shape the way your firm reports to clients, manages performance data, and ultimately delivers on its promise of transparency and trust.
This blog marks the first post in our five-part series on evaluating middle office outsourcing providers. Over the next four weeks, we’ll explore the critical dimensions of provider selection:
- Reporting & Performance Analytics (this post)
- Trade Settlements
- Accounting Systems & Asset Class Coverage
- Client Engagement
- Data Licensing
Let’s start where it matters most: reporting and performance analytics. These two areas are often the front lines of client perception and the backbone of internal decision-making. Get them wrong, and everything else becomes harder. Get them right, and you create trust, credibility, and efficiency across your organization.
Start with Internal Questions
Before evaluating providers, firms need clarity on their own pain points and objectives. Without this step, outsourcing risks becoming a patch rather than a solution.
Reporting
- What reporting pain points or gaps are we trying to solve?
- What do we want client reports to look like in the future, a full revamp to modernize reporting, or consistency with today’s templates?
- Do we have the right stakeholders involved to define our needs for internal and management reporting? Who will test and sign off on requirements?
Performance & Analytics
- Do we have the right benchmarks for comparison?
- Is our internal data clean and structured enough to support robust performance analytics and a smooth data conversion?
- Who uses performance data internally (e.g., portfolio managers, client teams, risk), and are current reports meeting their needs in terms of granularity and timeliness?
Key Questions for a Potential Provider
Once you understand your needs, it’s time to turn the spotlight on providers. Their answers will reveal not just capability, but also flexibility, scalability, and service culture.
Reporting
- Data Quality & Accuracy: What processes confirm data points before client reporting runs? Is dedicated support or account management available?
- Timeliness & Delivery: What are your standard SLAs for report delivery? How are reports delivered (client portal, secure email links, FTP, or other)?
- Customization & Flexibility:
- How flexible is your reporting engine in formats (Excel, PDF, dashboards)?
- Can we create ad hoc reports without relying on your development team?
- Do you support dynamic dashboards with drill-down capabilities or only static reports?
- Can we add commentary or embed reports from other sources?
- Do you support APIs for data extraction and easy import of external data?
- How do you handle change requests or reporting enhancements?
Performance & Analytics
- Methodology & Accuracy: What calculation methodologies do you support (e.g., TWR, IRR, Modified Dietz)? How do you handle cash flows, fees, and corporate actions? Is your system GIPS-compliant?
- Attribution: What types of attribution do you support (Brinson, multi-factor, fixed income)? Can you handle multi-currency and multi-asset class attribution? How do you manage custom or blended benchmarks?
- Data Quality & Reconciliation:
- What quality controls exist for transaction and holding data?
- How is performance “locked down”?
- Is there an audit trail for calculations and overrides?
- How are breaks identified and resolved? Can historical performance be restated if data changes, with version history maintained?
Why It Matters
Reporting and performance analytics are the true test of a provider’s value. They require both precision and flexibility; the ability to deliver accurate, timely data in formats that resonate with clients and empower internal teams. A provider that cannot demonstrate strength here may struggle in other operational areas, leaving your firm exposed to risk and inefficiency.
By asking the right internal and external questions, you lay the groundwork for a partnership built on trust and transparency.
Coming next in our series: Part 2: Accounting Systems & Asset Class Coverage — where we’ll explore how to evaluate a provider’s ability to support your books today and future-proof your operating model.