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Duties to Clients - III(D) Performance Presentation


What is the primary directive of Standard III(D) Performance Presentation? When communicating investment performance information, Members and Candidates must make reasonable efforts to make sure that this information is fair, accurate, and complete.

Name the four common practices that have hindered performance presentation and comparability. 1. Representative accounts - only the best results are presented. 2. Survivorship bias - accounts that have been terminated are excluded from the results presented. 3. Portability of investment results - results from previous employment are disclosed. 4. Varying time periods - only the results for the good time periods are reflected.

a. demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations of issues involving issues of personal integrity

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b. distinguish between conduct that conforms to the Code and Standards and conduct that violates the Code and Standards

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Can a firm claim to be in compliance with Standard III(D) Performance Presentation if they follow most, but not all, of the standards? No.

c. recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct

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When maintaining data about your firm’s investment performance, what are the four questions you should ask to be complete? 1. How many years of past performance does this information reflect? 2. Does it reflect performance for the prior year only, after several years of poor performance, or an average of several years of performance? 3. Has the performance been measured in accordance with CFA Institute’s standards? 4. Does investment performance vary widely among different classes of funds or accounts? If so, the member must describe investment performance by classes rather than by an overall average figure and accurately explain what the performance figures represent.