By Thomas Tscherrig

Principles for Investment Reporting

9. May 2017
Client Reporting
White Paper

The Principles of Investment Reporting were developed and published by the CFA Institute in 2014. They facilitate the dialogue between the creator and the consumer of the reporting.

The Principles for Investment Reporting enable communication between creators of investment reports (such as investment management firms and custodians) and the intended recipients (including investors and portfolio managers). The objective is to align the comprehension and requirements of both the creators and the recipients of the investment report.

The Principles for Investment Reporting do not aim to limit or define the specific elements that must be included in a report. Instead, their purpose is to ensure that once a report is created, it contains adequate information or directs the recipient to easily accessible sources, enabling a clear understanding of the report’s contents and the rationale behind the presented selections.

Why Principles for Investment Reporting are needed

There are no globally accepted industry practices to address transparency and clarity issues in reporting investment information to existing clients. While GIPS standards focus on transparency in performance measurement for prospective clients, existing clients in the financial industry face similar challenges. This gap parallels the situation of prospective clients before the development of performance presentation standards like GIPS.

There are six key areas where reporting today is lacking:

  1. Transparency and clarity
  2. Client perspective
  3. Fee transparency
  4. Treatment of complex technical issues
  5. Understanding between preparers and users
  6. Anticipation of regulatory trend

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