Performance Perspectives Blog

Opining on the sacred benchmark criteria

by | Feb 1, 2018

With this post, I feel that I am risking a charge of blasphemy, as I dare to take on what appears to be something sacred:

The benchmark criteria.

What criteria? You know, those seven (now eight) items that the CFA Institute has championed for quite some time. They’re addressed in both the CFA and CIPM exams, and now have made it into the draft GIPS(R) draft benchmark guidance statement. One might wonder if this document could have been released without them.

When I recently reviewed the GS, and saw them there, I guess I lost it a bit, since I’ve grown tired of seeing them (even though WE teach them in our Fundamentals of Performance class, but that’s a different matter).

Why my response? Partly because I question their efficacy; their legitimacy; their value. My comment letter touches on it, but not to the degree I do here and in our newsletter.

Consider this …

Of the original seven, peer groups fail on six of them, and yet, peer groups are considered a legitimate benchmark. In what other line of work could we find something failing 86% and still be acceptable?

But, I, for one, think peer groups are perfectly acceptable. I also feel that absolute benchmarks are, too, even though their pass rate is a dismal 57% (clearly a grade of “F”!).

In the soon-to-be-released newsletter (which we’re not sure whether it’ll be a delayed January or February (with no January this year), I have a bit more to say on this. However, rather than continuing any further, I’d like to make you wait and see! I guess I’m providing a bit of drama for you.

Oh, and if you see me burned at the stake, you’ll know why!

Why seven, anyway?

It just occurred to me, as I was about to wrap this post up: why seven (in the original publishing of them)? Is it to align with the seven deadly sins? Now, can you see why I am fearing to be labeled a blaspheme! Well, at least there are now eight, so I can relax a bit…maybe.