GIPS® Year-end Review and Testing Checklist

As year-end approaches, it’s a great time for asset management firms who claim compliance with the Global Investment Performance Standards (GIPS®) to do a thorough review of their GIPS program’s policies and procedures.

Guardian Performance Solutions’ Amy Jones, CIPM, and Arin Stancil, CFA, CIPM, recently co-authored an article for NSCP’s “Currents” that tells you everything you need to do to ensure your firm’s GIPS program and statistics are in compliance ahead of the year-end reporting crunch.

The article gives thorough coverage of topics such as:

  • GIPS Policies and Procedures
  • List of Composite Descriptions
  • Individual Composites
  • Net-of-Fees Calculations
  • Total Firm AUM
  • GIPS-compliant Presentations (CPs)
  • GIPS Program Governance and Oversight

We highly recommend reviewing the full article for specific action items under each topic. You can access it here.

Guardian Performance Solutions advises Assette on the software we’ve developed to automatically calculate all GIPS-required statistical data—including total firm AUM, non-fee paying assets and bundled fees—and maintain CPs for our clients.

If you would like to learn more about how Assette supports GIPS compliance and can help you avoid GIPS errors and omissions in your client reports, fact sheets, pitch books and marketing presentations, please visit our website.

7 Best Practices for Asset Management Database Success

Providing data to multiple databases is a fact of life if institutional asset managers want to compete in new business opportunities.

The most important thing a manager can do to ensure success is to avoid triggering red flags that will exclude them from consideration by consultants and asset owners.  That means data inputs must be timely, accurate and consistent across multiple databases for every single reporting period.

Sounds simple, right?

It’s not.

That was our main takeaway from “The Journey from Data to Success,” the information-packed webinar hosted by Assette partner eVestment this fall.

It was full of great insights and tips to help investment firms avoid the dreaded red flag by better managing the data required by manager databases. You can view it in its entirety and download the presentation slides here.

One of the most powerful—and actionable— segments was “Database Best Practices.” In it, eVestment highlighted seven things managers can do to make the data input process more efficient and to ensure their firm’s data are seen by as many potential buyers and influencers as possible.

Here they are, along with some of our thoughts:

  1. Answer what is being asked
    • Know what each database wants and how they define their fields.
    • Pay special attention to AUM fields—some are vague and/or broad, others are very specific.
    • When in doubt, ask.
  1. Don’t be an outlier
    • The wrong data in a field is a red flag.
    • Never force a strategy into a bucket where it doesn’t belong—it’ll be flagged when performance patterns don’t align in peer comparisons.
  1. Be consistent
    • Within databases, as well as across databases, RFPs and other marketing materials. Consultants often use multiple databases to screen managers, and they also rely on RFPs, fact sheets and pitch books.
    • With qualitative inputs and narratives. This can be a moving target, especially when it comes to investment strategy narratives. Be sure you are using the same narratives in RFPs, pitch books and all manager databases.
    • Have timely update procedures in place when a Subject Matter Expert develops a new qualitative answer.
  1. Dedicate resources to the function
    • Include database specialists and create a cross-functional team with clear accountability and management of content.
    • Leverage technology and specialist database update services to streamline the process and help internal staff be more efficient.
  1. Review data frequently (and carefully)
    • Review all qualitative and quantitative elements before submitting to each database or updating service.
    • Utilize a manageable review schedule of existing database language and data, e.g., do five strategies every quarter.
    • Pay attention to details, e.g., dates on your GIPS® Verification letter and changes to minimum fee/account size. Little things like staff titles, credentials and years of experience can quickly become out of sync across different materials and databases, especially when they appear in different formats.
    • Pay attention to whether databases have added or changed questions or fields.
  1. Provide data promptly
    • Submit data as soon as possible. That is, once your accounts are reconciled, submit data within days instead of weeks. The sooner your data appears in databases, the sooner you may appear in shadow searches.
    • Keep strict internal deadlines and adhere to them.
    • Help senior management understand what’s at stake and the opportunity cost of missing deadlines.
  1. Get buy-in from your experts
    • Involve internal Subject Matter Experts in the process, especially for ensuring the latest qualitative content is in reflected in all databases.
    • Have multiple stakeholders review qualitative narratives.
    • Employ workflow tools to manage the review process and keep track of a “single version of the truth.”

Following these best practices will go a long way toward making sure your firm isn’t missing out on mandates from institutional clients. If you would like more detailed insights into how to maximize your firm’s exposure in manager databases, here’s a link to our library of related blog posts.

Welcome Joe Devlin, our new Director of Client Service!

Here at Assette, we’re obsessed with providing the best client service in the industry.  In support of our ongoing commitment to that effort, we’re thrilled to announce that Joseph P. Devlin, CFA, is joining our great team as Director of Client Service. He’ll be responsible for the overall management of all client relationships, and he’ll also be developing more educational content for our Help site to make it even easier for clients to use Assette.

About Joe

Joe has over 25 years of institutional asset management industry experience. As a former research analyst and portfolio management team member, his expertise in performance measurement, attribution, and portfolio analytics ranges from system design to implementation and client consulting.  Those skills will greatly enhance the client experience during onboarding, training, and ongoing use of our automated sales and client communications software to create pitch books, client presentations, client reports, database input, and secure client portals.

Joe comes to us from State Street Bank & Trust Company, where he helped institutional clients deliver a consistent view of their asset mix, performance results, and risk measures to support strategic decision making. Prior to that, he spent 23 years at Fidelity Investments. Joe earned a BA in Economics from Middlebury College and an MBA from Cornell University. He also holds the Chartered Financial Analyst® designation.

6 SEC Compliance Gotchas in Marketing Materials—and How to Avoid Them

Year-end is fast approaching, and now’s a great time to make sure all your compliance ducks are in a row.

According to compliance expert Amy Jones, CIPM, founder and principal at Guardian Performance Solutions, LLC, “Investment advisers are constantly struggling with how to navigate the Advertising Rule and tell their story without inadvertently committing violations. The OCIE Risk Alert is a great tool for these firms so that they can see the type of problems other firms have had and to help them avoid making the same mistakes.”

Read more…

3 Must-have Features When Automating the Last Mile

There’s no doubt that automation is the best way to eliminate last-mile risks. Automating the last mile is easy and cost-effective. There are lots of options. You can develop in-house software, purchase and install on-premises applications, or sign up for cloud-based services.

No matter which approach you choose, make sure your automated solution:

Read more…

3 Last-Mile Questions Every CCO Should Ask their Marketing/Operations Staff

Operation due diligence staff at asset owners—and their consultants—have become aware of last-mile issues at investment management firms, and many are now asking asset managers probing questions about how they handle the last mile.

Our advice: Forewarned is forearmed! Don’t let your firm be caught off guard by inquiries into your last-mile policies and procedures. Your marketing/operations staff should be able to answer the three questions below, address any flaws in their processes and procedures, and craft good answers for use in DDQs/RFPs and client/consultant meetings:

Read more…

Last-Mile Riddle: What takes 20 years to build and 5 minutes to ruin?

Your firm’s reputation. And when an investment firm’s reputation for accurate, reliable reporting is called into question, revenue-producing AUM takes a direct hit. Reputational risk stemming from regulatory missteps is a given. But operational risk can be just as damaging—and more insidious.

For example:

Read more…

The CCOs #2 Last-Mile Problem: Sloppy Operations

Regulators don’t like sloppy operations. Inadequate internal processes lead to performance-reporting mistakes in marketing and sales documents. And a pattern of operational mistakes invites regulatory scrutiny.

No CCO wants that.

Read more…