When communicating investment performance information, Members and
Candidates must make reasonable efforts to ensure that it is fair, accurate,
The Standard encourages full disclosure of performance data and prohibits misleading presentations. For brief presentations, clients should be directed to where they can obtain more complete information.
Preferred is to comply with the GIPS Standards. Failing this, members should:
- consider the sophistication of the audience
- present the performance of a weighted composite of similar portfolios
- include terminated accounts as part of performance history
- include disclosures that fully explain the results
- maintain the data and records used in performance calculations
The CFA Institute Standards of Practice Handbook provides several examples of potential performance presentation violations.
- Implying a certain level of performance
- Incorrectly claiming compliance with the GIPS Standards
- Including performance achieved at a different employer, without fully disclosing so
- Presenting model portfolio performance without disclosing that it was simulated
- Presenting the performance only of selected portfolios
- Changing presentation methods without properly informing clients