Performance Perspectives Blog

“Your results comply …”

by | Mar 29, 2010

Just when you thought it was safe.

Years ago some folks thought that simply the use of certain software would automatically make them compliant with the AIMR-PPS(R) and/or GIPS(R) standards. But by now, we would think that this myth would have gone away. But it hasn’t. In a recent online article by Financial Advisor Magazine titled “Trading Spaces,” we learn of a nifty way for advisors (and others) to make money, simply by letting people know of their trades. This seems like an extension to the variation on wrap business, where advisors inform others of their strategies and reap a fee for doing so.

One firm, Covestor Investment Management,” provides such a service and uses Advent Software’s tools to track performance. The article tells us that “your results comply with global investment performance standards [sic] administered by the CFA Institute.” We can perhaps excuse the lower cased standards title in the sentence, but should be concerned with the suggestion that by simply having results on a system they will comply with the standards: if life could only be so simple.

I have e-mailed the magazine’s online editor to inform her of these errors and hope that corrections are issued. To those less sophisticated or knowledgeable about the standards, such a statement might be taken at face value, which can only result in problems.

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