Performance reporting from a Dennis Rodman perspective

In a recent blog post, I commented how Dennis Rodman, the NBA Hall of Famer, inspired my formatting for that particular post.

In his autobiography, Bad as I Wanna Be, Dennis utilized some font magic, which I'd never seen before or since. Variable font sizing, bolding, etc., were employed throughout the book. His dramatic use of these tools were, I guess, in line with his own personal style, which through the inking of tattoos around his body, hair color changes, various body piercings, and clothing choices, make him a person who cannot be easily missed.

Well, might it not also be worthwhile to consider introducing a little "Dennis" into your performance reporting?

Why not accentuate certain items by bolding or enlarging the font size a bit? Why not introduce color, since a single color is not just monochromatic, it can also be monotonous!

Add some underlining or italics to set apart certain text.

Words alone convey information, no doubt. But, by taking advantage of the ability to alter font sizes and appearances, you can add dramatics and emphasis; can highlight what needs attention; can direct readers to items you really feel they need to notice.

As you may already know, I am not a fan of the idea of performance reporting standards. Firms often take pride in the custom materials they provide their clients, and don't need to conform to anyone's idea of "best practices." I doubt if we'll see anything regarding what I'm suggesting today in the ultimate standards document that's produced. But consider adding some of these techniques to your reporting. You're sure to get some attention!

BTW, I recommend Dennis' book. I read it when it first appeared, and found it quite enjoyable. Dennis is a unique character, no doubt.

René Descartes and client reporting

Leave it to my friend, Philip Lawton, PhD, CFA, CIPM, to find a way to link a philosopher with client reporting. In a recent blog post, he did just that, commenting on the initiative spearheaded by Stefan Illmer, to develop client performance reporting standards for the CFA Institute.

I want to preface my remarks by saying that I love Stefan;  he is truly a gift to our industry. He has served us all quite well, most notably in his work on the GIPS(R) (Global Investment Performance Standards) Executive Committee. He is a great leader, who is skilled at the art of compromise. Client reporting has been a passion of Stefan's for some time (he was involved in the development of guidance for the European Investment Performance Committee, several years back). You should also know that Stefan and I agree on many more things than we disagree on (for example, we are both passionate champions of money weighting). Stefan is apparently being assisted by Dmitri Senik, along with others from the industry. I also hold Dmitri in high regard, as well as those members of the committee who have been identified to me. Volunteers should always be honored, for their contributions to our industry are great.

In his post, Philip appears to favor the introduction of standards; I do not.
My issues include:

• What problem are these standards to solve? You might ask, why must there be a problem, and you'd have a valid point; and so, why do we need them, then?
• Has there been any evidence that the industry wants them? To the contrary, I've found that the industry clearly does not.
• Many firms have custom reporting, and have little interest in adopting standards.
• What impact will the standards have on asset managers? Plenty! Not only additional time and effort to comply, but also the cost of getting verified (as I understand it, Stefan's committee plans to include this as a recommendation). I often find myself having to remind folks that our firm, The Spaulding Group, actually is a "for profit" company. This isn't always so obvious, when I come out against GIPS performance examinations, and now reporting standards, which would surely bring additional revenue to our firm. But I do not want our verification clients to spend money they don't need to. I am doing a GIPS examination this week, so am clearly supportive of clients who find benefits in having them done; and, we will no doubt be ready-and-willing to verify clients' compliance with reporting standards. We just find the notion of such standards difficult to appreciate.

Let's face it: the CFA Institute has a great presence in our industry. Their contributions are exceptional. We fully support the CIPM program, recognize the value of the CFA, and obviously support GIPS. However, moving forward with this initiative, without first validating the need and desire for standards, is a problem, I believe. Will the reporting standards be implemented and introduced, regardless of what the majority of firms feel? If yes, it is likely that they will become de facto standards, requiring compliance.

We've taken this topic up at the Performance Measurement, Attribution & Risk (PMAR) conferences, meetings of the Performance Measurement Forum, and in conversations with clients, and find an overwhelming opposition to such standards. There is, however, interest in "guidance." Will Stefan and Dmitri's committee be willing to adjust what they're doing to introduce this softer item, or are they (and the CFA Institute) committed to standards? The CFA Institute has enough clout that the line from Field of Dreams will read "build it and they must come." Hopefully flexibility will be present, but only time will tell.

p.s., The Battle Royale at this year's PMAR conferences will deal with this topic. In London you'll be able to witness Stefan battle my colleague, John D. Simpson, CIPM. To avoid bias, Patrick Fowler will, as he always does, serve as moderator.

Client reporting standards: are they necessary?

At last month's PMAR (Performance Measurement, Attribution & Risk) IX Conference in Philadelphia, PA (USA), Beth Kaiser, CFA, CIPM of the CFA Institute informed our attendees of the initiative that is underway to develop client reporting standards. And this week in London, at PMAR Europe II, Stefan Illmer, PhD did the same. I have great respect for both Beth and Stefan, and appreciate their sharing of many of the details of this project.

Last night at dinner, I was reminded by my friend Steve Campisi, CFA that at one time I supported seeing such guidance being developed (perhaps I was suffering from a senior moment in not recalling this). In reality, I do support guidance, though not standards, and not promulgated by an institution of the CFA Institute's stature.

My concerns can be boiled down to: what will the added costs, in manpower and money, be for firms to become "compliant" with these standards and to have their compliance reviewed independently by an independent verifier?

I have a great deal more to say on this topic, but will save it for this month's newsletter, when I will also share some of the key details about this initiative, something all asset managers, especially those compliant with GIPS(R) (Global Investment Performance Standards) should be aware of.

Client reporting standards: a good idea?

I am in Philadelphia for a couple days, hosting PMAR IX. Yesterday we heard from Beth Kaiser about a CFA Institute initiative to possibly develop reporting standards for clients. I must confess that I have mixed feelings about this.

There are two main concerns that I have:

1. Where is the problem? The FAF standards, which became the AIMR-PPS(R) standards, and (arguably) the GIPS(R) standards, were developed to solve a problem and a need for improved and ethical representation of past performance for prospective clients. But where is the problem in client reporting? Granted, some firms often want ideas, but is this the way to provide solutions? Unclear to me.
2. Will this be GIPS II? By this I mean, will this be another standard that firms will be required to comply with, possibly meaning additional costs?

On the other hand, I have witnessed cases where some individuals want to see guidance, and so perhaps this idea might be a good one. I will keep an open mind, and encourage you to be mindful of what is occurring, as it will no doubt be of interest to all in our industry.

A few yeas ago, the EIPC (European Investment Performance Council) developed guidance for reporting, and this will no doubt be used during this process. If you are interested in seeing a copy of what they developed, please let me know, and I'll send it along.

By the way, we will address this topic again next month, at PMAR Europe II in London.