Performance Perspectives Blog
ANNOUNCEMENT! New Performance Standard Proposed
BrightScope and The Spaulding Group, Inc. Release White Paper That Proposes a Universal Performance Standard for Financial Advisors
The Adoption of Universal Advisor Performance Standards Will Broaden the Base of Advisors Who Can Report Performance to Both Clients and Prospects
Somerset, NJ – May 22, 2012
PR for The Spaulding Group
Atomic PR for BrightScope
BrightScope, a leading provider of independent financial information and investment research, and The Spaulding Group, a global leader in investment performance measurement products and services, today jointly announced the release of a new white paper, “Universal Advisory Performance Standards,” highlighting the need for an industry consensus performance standard for financial advisors. The free white paper can be downloaded at www.uapstandards.org.
Today’s technology allows consumers to quickly and easily search for and compare mutual funds, 401k plans, mortgages, and many other types of financial products online, but when it comes to financial advisors there is not an efficient way to select one based on performance.
“Over time, we envision that every financial advisor will want and need to disclose the performance of their investment selections on behalf of clients,” said Mike Alfred, the CEO and co-founder of BrightScope. “As the leading performance measurement firm in the money management industry, The Spaulding Group’s expertise is perfectly complimentary to BrightScope’s vision, and together we’re confident we can unify the industry around this new standard.”
Currently many advisors and broker-dealers do not calculate and do not disclose performance to the general public, making it difficult for prospects to select the right advisor and challenging for the best advisors to grow their practice. As a result, the act of selecting an advisor has been limited to personal recommendations, and what little information consumers can find on the SEC and FINRA websites.
“BrightScope Advisor Pages has done a good job to bring transparency into the marketplace, however since there is no clear guidance or industry standard, many advisors refrain from reporting performance out of fear they might run afoul of SEC and FINRA advertising regulations,” said David Spaulding, President of The Spaulding Group, Inc.”When there is a single standard created specifically for the money management industry, individuals will understandably assume that it applies to them, when it may not. As a result, there can be confusion as well as the use of something that is less than appropriate. By introducing a new standard, specifically designed for financial advisors, we should see increased reporting; it will also allow investors to make a more informed decision on which professional is best qualified to serve them.”
To further support universal standards, BrightScope and The Spaulding Group have founded the Committee for a Universal Advisor Performance Standard. Inaugural advisors to the committee include John Rekenthaler, Vice President of Research at Morningstar; Ric Edelman, Chairman and CEO of Edelman Financial Services LLC; James Edmonds, Executive Director at Morgan Stanley Smith Barney; Joseph Klimas, Vice President of Portfolio Research & Consulting Group at Natixis; Franklin Tsung, President of Appcrown; Christopher L. Davis, President of Money Management Institute and Steven W. Stone, Partner at Morgan, Lewis & Bockius LLP. More information can be found at www.uapstandards.org.
About The Spaulding Group, Inc.
With offices in the New York City and Los Angeles metropolitan areas, The Spaulding Group, Inc. is the leader in investment performance measurement products and services. TSG provides consulting along with GIPS and non-GIPS verification services; offers a unique Software Certification service; publishes The Journal of Performance Measurement®, a quarterly publication launched in 1996; and hosts the Performance Measurement Forum. The firm also sponsors the annual Performance Measurement, Attribution and Risk (PMAR) conference and PMAR Europe, which have come to be recognized as the leading performance measurement conferences in the industry. TSG’s Institute of Performance Measurement offers performance measurement training, including a fundamental’s course on performance measurement, a course on performance attribution, and two CIPM exam preparation courses.
BrightScope is a financial information company that brings transparency to opaque markets through independent research and analysis. Delivered through web-based software, BrightScope data drives better decision-making for individual investors, corporate plan sponsors, asset managers, broker-dealers, and financial advisors. The BrightScope Rating™, developed in partnership with leading independent 401k fiduciaries, reviews more than 200 unique data inputs per plan and calculates a single numerical score which defines plan quality at the company level. In April 2011, the company launched BrightScope Advisor Pages™, the first comprehensive and publicly available directory of financial advisors designed to help consumers discover information and conduct due diligence on wealth management professionals. BrightScope also markets a suite of data analytics software products to Fortune 1000 companies, asset managers, broker-dealers, financial advisors, and other market participants. Public ratings for more than 46,000 retirement plans as well as rating definitions, criteria and methodologies, and information on more than 575,000 financial advisors and 45,000 advisory firms are available for free at www.brightscope.com.