Performance Solutions

Regulators continue to focus on investment performance, both from an advertising perspective as well as with regard to the completeness and accuracy of data used to support reported investment returns. In addition to GIPS® verification, ACA Performance Services offers a variety of performance solutions that aid firms with ensuring that their performance information is accurate and supportable.

FOCUSED PERFORMANCE REVIEW

 

ACA’s Focused Performance Review is an in-depth forensic review of a firm’s compliance structure for calculating and substantiating investment performance. In addition, this review assesses whether the firm’s controls governing performance reporting would stand up to regulatory scrutiny. Our service includes a review of the appropriateness of the methodologies used to calculate performance, the adequacy of supporting books and records, the documented controls and procedures, and the completeness of accompanying disclosures. Our review also assists with the execution of the firm’s compliance program by assessing risks and gaps in internal performance processes.

 

What does ACA's Focused Performance Review include?

  • ACA’s Focused Performance Reviews include a detailed review of your firm’s:

  • Documented policies and procedures for calculating and reporting performance results;

  • Calculation methodologies and their consistency with leading industry standards via recalculation of investment and fund-level returns;

  • Ability to provide adequate records to support advertised performance; and

  • Marketing materials to help ensure that disclosures meet regulatory requirements and accurately portray the information presented.

Benefits of an ACA Focused Performance Review

  • Assists Chief Compliance Officers (“CCOs”) with assessing risks and gaps in internal controls related to the generation and distribution of investment performance. Failing to meet these responsibilities can lead to individual charges by regulators against CCOs.

  • Helps firms identify weaknesses in their ability to locate and provide the books and records used to support underlying portfolio and strategy-level performance in a timely manner. This task can be particularly challenging when long track records are built across multiple systems or spreadsheets.

  • Helps firms avoid regulatory pitfalls. When a firm inconsistently uses performance information across different parts of its business, or through consultants or affiliates, marketing materials can be deemed misleading, especially if they fail to properly reflect performance and do not include complete and accurate disclosures.

PERFORMANCE CERTIFICATION

 

When presenting a performance track record, firms are often asked for an independent third-party validation to aid in supporting the track record. ACA is pleased to offer its Performance Certification services to provide assurance to firms that their performance information is supportable and consistent with firm methodologies. 

The Performance Certification is an independent third-party review and examination of input data, methodologies, and assumptions used to support an investment performance track record. This product is designed to bring credibility to the historical track record by examining your adherence to disclosed methodologies. This solution results in a tailored performance certification statement provided by ACA to your firm that may be shared with the marketplace.

What does ACA's Performance Certification include?

  • In-depth examination of the performance track record, including:
    • Input data,
    • Calculation methodologies, and
    • Assumptions used to support an investment performance track record.
  • Evaluation and testing whether data is accurately and consistently entered by reviewing data entry procedures and sampling data entry results

  • Evaluation and testing whether period returns appear to be calculated in accordance with firm methodologies

  • Evaluation and testing whether period returns appear to be properly linked to arrive at annual performance

Benefits of ACA's Performance Certification

  • Provides assurance and lends credibility to the underlying track record

  • Assists your firm with mitigating regulatory risks related to investment performance

  • Provides access to certain advisory platforms for performance marketing purposes

  • Certifications are not bound by the Global Investment Performance Standards (GIPS®) and therefore provide more flexibility when determining the scope of an engagement

  • Provides a framework that helps strengthen your firm's internal controls

  • Results in a customized statement by ACA to distribute to clients, prospects and/or other requesters of due diligence information

REQUEST MORE INFORMATION

 

For more information on our services, please fill out our contact form or call Justin Guthrie at (423) 544-6770.