Customized investment performance analytics solution to mitigate risk while freeing up valuable time
The construction of composites and the associated oversight comes with various ongoing risks that firms struggle to appropriately mitigate due to lack of data and limited internal resources. These risks are difficult to reduce without access to accurate information and appropriate technology. Even with access, the need to understand the data can play an even more important role.
Our Performance Analytics Services (PAS) helps firms create and maintain a robust composite maintenance process to allow for greater transparency and accuracy.
According to ACA's May 2021 webcast "Mitigate Risks Associated with Composite Maintenance using ACA’s Performance Analytics Services Dashboard."
of firms are concerned their internal controls related to performance measurement and advertising are effective.
of firms perform manual reviews to evaluate whether an investment strategy is being implemented consistently.
of firms use (often more expensive) technology solutions/specific software to evaluate and analyze investment strategies.
Using our Composite Review report, firms will have the ability to visualize how outliers are impacting overall composite performance. Access to this data allows firms to assess and prioritize where time is best spent and which composites need a more detailed review.
Our proprietary Composite Scorecard process gives firms the opportunity to establish investment performance analytics parameters and thresholds that produce a pass/fail grade for a particular composite. Using various metrics, we work with firms to customize a testing process that ultimately helps determine which composites are reasonable to pass on and which composites have issues that may need addressed before marketing the performance.
Our Strategy Adherence and Benchmark Appropriateness report allows firms to establish procedures to monitor portfolio managers and financial advisors and ensure the management of the portfolio is adhering to the stated strategy. By tracking the performance over time in relation to a stated index, we can visually demonstrate the decision makers may have drifted from their stated mandate.
For firms looking to ensure that, in accordance with the SEC's new Marketing Rule, any ‘related performance’ is not materially higher than that of a composite for the same strategy, we can help construct composites and complete annual testing to help you adhere to this new requirement. We can also provide consulting around how the industry is assessing materiality and help develop the review process needed to monitor this performance on an ongoing basis.
Join us as we introduce ACA’s PAS and how it can support firms like yours with creating and maintaining a robust process which mitigates risk while freeing up valuable time.
Strengthen your firm’s composite maintenance process to allow for greater transparency and accuracy
Provides custom investment performance analytics around composite integrity, strategy adherence, and ongoing strategy implementation
Review outlier performance to help ensure accounts represent the marketed strategy
In addition to developing marketing materials and ensuring appropriate disclosures, firms must ensure that the performance being generated truly reflects the fund or strategy being offered.
The long-awaited modernization of the Marketing Rule was added to the Federal Register on March 5, 2021. Not only does the final marketing rule consolidate the advertising and cash solicitation rules, it also (among other things) categorizes certain considerations for presenting investment performance, effectively streamlining guidance currently found across multiple staff letters.
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