How often should a brokerage reconcile its trust account?

How often a brokerage must reconcile its premium trust account is set by its provincial broker regulator, and the requirement varies across Canada. So the honest answer is: confirm the required frequency with your own provincial broker regulator rather than assuming a single national rule.

As a matter of good practice, many brokerages reconcile the trust account monthly. A monthly reconciliation confirms three things agree:

• The trust bank statement balance.
• The trust ledger in your broker management system.
• The trust liability — what you owe insurers and clients out of trust.

Reconciling monthly matters because trust drift compounds. Differences from cancellations, endorsements, timing, or posting errors are small and explainable when caught the same month, and they turn into a serious problem when they accumulate unnoticed. A monthly cadence means the brokerage can always prove that trust assets cover trust liabilities — with no shortfall.

Some firms reconcile more frequently than monthly, and some regulators may expect more (or specify timing or reporting requirements). The principle that does not vary is the underlying discipline: a brokerage should always be able to demonstrate, on demand, that the cash in trust is enough to cover what it owes out of trust.

For how reconciliation fits into the broader trust picture — assets vs liabilities, surplus vs shortfall — see our guide to insurance premium trust accounting in Canada.