Performance Perspectives Blog

Taking a cue from Pensions & Investments

by | Jun 19, 2014

The May 26, 2014 issue of Pensions & Investments has an editorial titled “The advancement of a bad idea.” It speaks of 11 European Commission member countries who are planning to introduce a financial transaction tax next year. That is not the subject of this blog post. However, I do like the title:

The advancement of a bad idea

idea 2I speak of the CFA Institute’s proposal to have firms that claim compliance with the GIPS(R) standards (Global Investment Performance Standards) to register annually their claim, as well as to provide information which may be considered sensitive by some.  I wrote at length about this in our April newsletters, and I remain seriously concerned.

In general, our firm has an exceptional relationship with the CFA Institute: they typically sponsor our annual conferences, and we sponsor theirs; we advertise in each other’s publications, and we always stand ready to assume a volunteer role, should the desire be made aware to us. But on this matter, we have to voice strong opposition.

I will confess that my greatest concern is that this information will make its way to some of our competitors, who happen to sit on the GIPS Executive Committee; the then likelihood that it will be utilized for marketing purposes is something that troubles me. But more importantly, the requirement for compliant firms to register is time consuming and has nothing to do with the spirit of GIPS.

Jonathan Boersma of the CFA Institute has blogged about this subject, but has failed to convince me of the benefits of going forward with this mandated registration. There have been numerous surveys over the year that provide insights people are interested in. Registration has nothing to do with compliance, and should not be mandated. My concerns include who the details will be shared with and how they might be used for marketing purposes. I’ve been privy to others’ comments, and have yet to see any that support it. But,  it’s important that you let the CFA Institute know your thoughts. You have until July 7th to respond. You can see the details here,