There’s no crying in baseball— or in investment management. Not with the SEC calling the game. These 3 rookie errors are easy to make and could cost your investment team the Series:
- Change-ups: Using different time periods of returns presented.
If your firm changes up the performance-reporting time series used in presentations from quarter to quarter, regulators may call it a strike. They expect you to have policies that identify a baseline of mandatory performance periods that must be included in every presentation. If you do, they may give you the walk. If you don’t, you’ll be out.
- Forgetting to Tag Up: Inadvertently including the wrong GIPS information.
If your firm claims GIPS compliance, regulators expect you to tag up on every composite performance information and disclosure required in marketing materials. If your marketing materials, strategy fact sheets and website pages are updated manually, it is easy for manual errors to take you off base. A common example is to inadvertently copy the GIPS statistics for one composite into materials designed for a different composite strategy.
- Doctoring the Ball: Cherry-picking stats to add color to your performance.
If your firm unintentionally shows only the top performance contributors and not the corresponding performance detractors, the SEC will eject you from the game.
Assette leads the industry in identifying last-mile problems like these—an idea that the NSCP, IAA and the CFA Institute have highlighted. Click below to read the Executive Summary of our paper, prepared with input from attorney Richard Kerr of K&L Gates LLP, and Amy Jones, CIPM, of Guardian Performance Solutions LLC, discussing regulatory risks in the last mile and recommended solutions.
Assette is also the industry leader in solving last-mile problems with cloud-based software that automatically integrates data from your accounting and analytics systems to generate marketing material and eliminate manual work.
If you’d like to learn more about how Assette can help your firm avoid last mile issues, please click here.