ACA acquiring Ashland’s GIPS verification practice

In case you haven’t heard, ACA Compliance Group has announced that they are acquiring Ashland Partners’ GIPS Verification and performance practice. We congratulate ACA for this major achievement.

From our estimates, Ashland was the #1 provider of verification services while ACA had been #2: obviously, the combination now makes ACA #1 (we believe we were #3, so we’re now #2 (and like Avis, we’ll have to “try harder“)).

As per their announcement, not surprisingly this brings the total number of firms they serve to well over 1,000. That’s one heck of a lot of clients to have to support. I suspect it has to be a daunting task. We wish them luck!

Comparing GIPS verification approaches

Probably also not surprising, we have, over the years, attempted to differentiate ourselves from our competition. It is our understanding that, for example:

• Both ACA and Ashland (and now the combination) use both senior and junior level verifiers, often staffing assignments with junior members; we, on the other hand, only use senior level verifiers.
• Both ACA and Ashland (and now the combined firm) will do “remote” verifications, while we insist on visiting our clients’ offices. We believe there are many benefits to this, as do our clients.
• Ashland has historically only done quarterly verifications while we (and we believe ACA) recommend annual. While we do quarterly for a very few of our clients, most agree that annual is preferred. 
• We discourage our clients from undergoing (what we believe are usually unnecessary, and therefore costly) performance examinations. We are unaware of any similar stance on the part of these two firms; in fact, we believe that Ashland, at least, had encouraged the use of examinations, even for “non-marketed” composites.

Not ACA’s first acquisition, but quite a bit different from the last

You may recall that ACA previously acquired the verification practice of Karyn Vincent, CFA, CIPM. This was not nearly as huge an acquisition as Ashland. Karyn retired from ACA last December, so they lost the benefits of having her expertise and experience serving them and their clients. I interviewed Karyn for a recent issue of The Journal of Performance Measurement(R). I’ve known Karyn for almost 25 years, and over the years have worked with her on a variety of committees.

We understand that part of the motivation for the sale of Ashland’s GIPS practice was their founder’s (Mel Ashland) desire to employ an “exit strategy.” I’ve known Mel for over 25 years. And while we haven’t always agreed on different aspects of the Standards, I admire his success, and congratulate him for his accomplishments. I also wish him well as he transitions to a new status.

Is it time for a change?

When your GIPS verification provider gets acquired, it places you in a bit of an awkward position. It is highly possible that you previously considered the acquiring firm, but rejected them for some reason; by default, they’re now  your verifier.

We know, for example, that many of ACA’s clients selected Vincent because of Karyn: but now Karyn’s gone, and they have ACA. Some, no doubt thought “we picked Karyn, not ACA!” Similar thoughts will surely go through the heads of many of Ashland’s clients, several of whom, I’m sure, have been their clients for two decades or longer.

We suspect that many of Ashland and ACA clients are wondering what the new firm will be like.

• How will being a client of such a huge firm impact their relationship with their verifier?
• What will change, given the historic differences in approach?

We know, from conversations we’ve had, that many of the Vincent clients have noticed changes. If any of these firms wish to consider alternatives going forward, we welcome the opportunity to speak with them. They can learn a bit about our GIPS and non-GIPS verification practice from visiting the verification page of our website. They can also call our offices (732-873-5700) or email Patrick Fowler (PFowler@tsgperformance.com) or Chris Spaulding (CSpaulding@tsgperformance.com).