# Why Tamarac and Schwab Disagree on Your $40M AUM Canonical: https://granular.to/blog/tamarac-schwab-disagree-40m-aum Published: 2026-06-17 Updated: 2026-06-17 Author: Trey Category: Field notes Tags: professional-services, operations, field-notes, knowledge-management > Why portfolio management dashboards and custodian feeds disagree on AUM at mid-market RIAs every Monday: T+1 settlement, corporate actions, cost basis, and pricing source mismatch. The reconciliation routine, what to tell clients, and where AI helps. > **TL;DR.** Every Monday at every $40M RIA, your portfolio management dashboard and your custodian feed disagree on AUM by 10 to 30 basis points. Four root causes drive 90% of the gap: T+1 settlement timing, corporate actions hitting ex-date before custodian confirmation, cost basis differences, and pricing source mismatch. Your ops team reconciles it by 11 AM. The advisors who quote a number before 11 AM are quoting wrong. By 8:45 AM Monday, your $40M RIA has three different AUM numbers. Your CRM shows $43.2M (the rollup it stored Friday at 5 PM ET). Tamarac shows $42.9M (overnight processing reconciled some but not all positions). Schwab's morning download will eventually show $43.1M (after T+1 settlement closes Friday's trades, which won't settle until Monday). None of them are wrong. They're showing different things at different timestamps. The fix isn't a new platform. It's a documented source-of-truth hierarchy so advisors quote consistent numbers and your ops manager stops being asked the same question every morning. ## Why the Numbers Disagree Four root causes. They show up in different combinations every week, but it's almost always one of these. **T+1 settlement timing.** Since the [SEC moved the standard settlement cycle to T+1 in May 2024](https://www.occ.gov/news-issuances/bulletins/2024/bulletin-2024-3.html), Friday's equity trades don't actually settle until Monday's close. Schwab posts positions at value-date (when securities and cash actually changed hands), so Friday's buys are still pending Monday morning. Tamarac processes at trade-date (when the order executed), so it already booked Friday's positions over the weekend. The gap closes by Monday EOD, but at 8:45 AM, the two systems will disagree on every position that traded last Friday. ![RIA operations dashboard showing T+1 settlement timing variance between Tamarac portfolio management system and Schwab custodian feed](/images/blog/tamarac-schwab-disagree-40m-aum-reconciliation-dashboard.jpg) **Corporate actions on ex-date versus payable date.** Dividends, splits, spin-offs, mergers. Your PMS adjusts on ex-date (the day the security trades without the dividend). Your custodian adjusts at payable date (when the cash actually arrives, often 2 to 30 days later). For a portfolio of 60 equities and ETFs, you'll hit two or three corporate actions a week. Each one creates a 5- to 50-basis-point divergence until the payable date clears. [Industry guidance from BNY](https://www.bny.com/corporate/global/en/t1/t1-faqs.html) flagged that T+1 compresses the window for catching corporate action errors before they hit position reconciliation, which means more breaks surface in your Monday morning queue, not fewer. **Cost basis differences.** Custodian-reported cost basis is what they received from the prior custodian, the issuing broker, or the IRS-mandated reporting cycle. Your PMS calculates cost basis after applying wash sale logic, short-term versus long-term reclassification, and any tax-lot accounting your firm has configured (FIFO, LIFO, specific identification, average cost). The two numbers diverge on every account that has wash sales, restricted stock, or any position transferred in from another custodian in the last 36 months. They diverge especially loudly in January after the 1099-B corrections cycle. **Pricing source mismatch.** Your PMS uses one market data vendor (typically IDC, Bloomberg, or Refinitiv). Schwab uses their own pricing source. For S&P 500 names, the two agree to four decimal places. For corporate bonds, municipal bonds, REITs, illiquid ETFs, private placements, and anything that doesn't trade every minute, they disagree. The smaller the position, the larger the relative gap. A 10-basis-point gap on a $43M AUM number is $43,000. On a single muni bond holding inside one account, the same 10-basis-point pricing gap is $200, which the client will notice on their statement. ## The Monday Reconciliation Routine Walk into any $40M RIA's back office between 7:30 and 11 AM Monday and you'll see the same sequence. **7:30 AM.** Ops manager pulls Friday's Schwab batch file, which represents positions as of Friday at 9 PM ET. (Schwab and most custodians publish their end-of-day feeds between 6 PM and midnight ET. Weekend-batch downloads are available by 6 AM Monday.) She opens the previous Friday's Tamarac close-of-business report alongside it. **8:00 AM.** She runs the position reconciliation report in Tamarac. This is intentionally first. [Industry guidance recommends position reconciliation before cash reconciliation](https://www.limina.com/blog/investment-reconciliation) because position drives cash, but not vice versa. By reconciling positions first, she eliminates one major reason cash could break, making the cash investigation faster. **8:30 AM.** The discrepancy list lands on her screen. On a normal Monday: 10 to 30 lines. On a quarter-end Monday after dividend payouts and corporate actions clear: 100+ lines. She tags each break by cause: timing (will self-resolve by Tuesday), corporate action (needs a journal entry), cost basis (needs manual adjustment), pricing (verify against Bloomberg, then accept or override). **9:00 AM.** She works the list. Most breaks are timing and need no action; she notes them and moves on. The real breaks (5 to 8 on a typical Monday) get adjustment journal entries. Each one takes 3 to 8 minutes. The cost basis breaks take longer because they require pulling the trade history, applying wash sale logic by hand, and confirming the tax lot allocation. **10:30 AM.** She posts the reconciled numbers to the firm's internal dashboard or a shared Google Sheet. Advisors now know which AUM number to quote, which performance figure to reference in meetings, and which positions to mention if asked. **11:00 AM.** The first client meetings of the day start with reconciled numbers. The advisors who run a 9 AM meeting are running on Friday's stale numbers and the post-meeting CRM updates create a second round of cleanup. ## What to Actually Tell Clients The number you give a client should always carry a timestamp. Not "we manage $43 million for you." Always "your account was valued at $1,247,300 as of Friday's close." The "as of" discipline is the single highest-leverage process change a $40M RIA can make, and it costs nothing to implement. **Performance reporting: pick one methodology and stay there.** Time-weighted return (TWR) is the industry standard for advisor performance reporting because it strips out the impact of cash flows. Money-weighted return (MWR, also called IRR) reflects what the client actually experienced including their deposit and withdrawal timing. Either is fine. Reporting both in the same statement, with the client free to pick the one they like, is the path to angry quarterly review meetings. Per [SEC Marketing Rule guidance](https://www.sec.gov/investment/marketing-rule-cdi), performance comparisons need to be apples-to-apples; mixing methodologies creates compliance exposure as well as confusion. **Cost basis on tax letters: the custodian's number wins.** Because that's what gets reported to the IRS. If your PMS disagrees, the PMS is wrong from a tax perspective even when it's right from a tax-lot accounting perspective. Document the reconciliation logic so your accountants and your clients' accountants know which number to trust. **AUM at quarter-end: use the custodian's settled-value at 4 PM ET on the last business day.** Never Tamarac's trade-date value. The custodian's number is what survives an SEC exam, what feeds your Form ADV update, and what your clients see on their statements. Anything else creates a reconciliation problem later that you'll spend more time on than it would have taken to get it right the first time. ## Where AI Agents Help (and Where They Don't) The Monday reconciliation routine is one of the better candidates for AI automation in an RIA back office. Not because it replaces the ops manager, but because it removes the busy-work portion of her morning and lets her focus on real exceptions. ![Wealth management operations specialist mid-reconciliation reviewing position discrepancies on a portfolio management screen with cool morning light from an adjacent window](/images/blog/tamarac-schwab-disagree-40m-aum-ops-workflow.jpg) **Where agents help:** - Surfacing the 10-30 normal discrepancies and pre-grouping them by root cause (timing vs corporate action vs cost basis vs pricing). The ops manager confirms the categorization in 30 seconds instead of categorizing each one herself. - Triaging which breaks need same-day attention versus which will self-resolve by Tuesday. A T+1 timing break with a Friday trade date does not need a journal entry. The agent can mark it and move on. - Drafting the adjustment journal entries for ops review. The ops manager approves or rejects, doesn't author from scratch. - Auto-flagging breaks that recur across multiple weeks on the same position (usually a vendor pricing error or a corporate action that didn't propagate cleanly). **Where agents don't help:** - Fixing the underlying timing mismatch. That's a custodian feed problem, not a software problem. Schwab posts when Schwab posts. Tamarac processes when Tamarac processes. No agent reaches into either system and changes the post time. - Replacing human judgment on cost basis edge cases. Wash sales, restricted stock, partial settlements, gift basis transfers, step-up basis on inherited positions. Each one needs a person who knows the client's tax situation. - Making the choice of source-of-truth hierarchy. That's a policy decision for the firm's principal, not a workflow decision for an agent. ## FAQ **Should we switch from Tamarac to Orion to fix this?** No. Every portfolio management system has the same problem. Orion, Black Diamond, Addepar, Tamarac, Advyzon. They all reconcile against custodian feeds, and the feeds arrive at different times with different conventions. The fix is process, not software. (If you're evaluating PMS platforms for other reasons, our [Tamarac vs Orion vs Black Diamond teardown](/blog/tamarac-orion-black-diamond-40m-ria) covers the actual differences that matter.) **Why does our cost basis number change after we file taxes?** Because the broker or prior custodian re-reported under amended 1099-B corrections. This typically happens in March or April when issuers issue corporate action restatements. It's painful and unavoidable. Document the rolling cost basis history so when a client asks "why did this change," you can show them. **Can we just use the custodian as source of truth and skip Tamarac?** For AUM at end-of-day, yes. For intraday performance, trading decisions, billing, and client reporting, no. The custodian doesn't do TWR or MWR, doesn't apply tax-lot logic across multiple accounts, and doesn't generate client-facing performance reports. You need both. **How long does proper T+1 reconciliation take if we don't have a dedicated ops team?** Firms below $40M usually skip true daily reconciliation and run on monthly closes plus advisor judgment. That works until the SEC examiner asks for a position breakdown by tax lot at quarter-end, or a client disputes a fee, or a corporate action goes wrong and nobody catches it for 90 days. Daily reconciliation is what an RIA outgrows into around $35M to $50M AUM. Below that, monthly is defensible. Above that, monthly is exposure. The Monday reconciliation routine isn't a software problem. It's a process problem most $40M RIAs already have the right tools for (Tamarac plus Schwab plus a billing platform). What they lack is the documented source-of-truth hierarchy and the timing discipline to know which number to quote when. The advisors who quote AUM before the 10:30 reconciliation post are the ones generating the angry client calls at quarter-end ("you told me $43.2M and the statement says $42.9M, what's going on?"). If your firm has been hiring more ops people to keep up with reconciliation, that's a sign the process needs rebuilding, not staffing. Granular builds AI agents that handle the timing-based reconciliation breaks so your ops team can focus on real adjustments. If this sounds like your Monday morning, [book 30 minutes with us](/). --- ## Keep Reading - **[Tamarac vs Orion vs Black Diamond: The $40M RIA Teardown](/blog/tamarac-orion-black-diamond-40m-ria)**. A platform-by-platform comparison of the three portfolio management systems mid-market RIAs evaluate, with focus on what actually changes and what doesn't when you switch. - **[How $40M RIAs Reconcile Billing Between Custodian and CRM](/blog/ria-billing-reconciliation-custodian-crm)**. The companion piece on billing reconciliation, where the same data divergence creates client-facing fee errors at quarter-end.