Violation of Performance Reporting Standards

Very Hard Asset Manager Code Performance Reporting

As part of annual compliance, a firm is reviewing its adherence to the CFA Institute's Asset Manager Code, specifically in the context of performance reporting. The firm has a robust process for reporting performance to clients, which includes various key performance indicators (KPIs). However, a recent audit revealed that the firm uses net-of-fee performance reporting for most clients but has inconsistently applied gross-of-fee reporting for larger institutional clients.

According to the Asset Manager Code, which of the following practices would be considered a violation related to performance reporting?

Only reporting gross-of-fee performance to institutional clients without consistency in methodology across all client segments.

Generating performance reports that include only best-case scenarios without presenting the entire historical performance data.

Providing clients with comprehensive performance reports that analyze risk-adjusted returns without including absolute return figures.

Hint

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% Correct82%