Uniform perfomance standards for financial advisers?
Because of the many different types of account management, evaluating a financial adviser's effectiveness can be difficult. New technologies can help.
Because of the many different types of account management, evaluating a financial adviser's effectiveness can be difficult. New technologies can help.
One of the most frustrating aspects of running separate accounts for clients is performance documentation.聽 The majority of the accounts most FAs manage are model-based but there are always small differences and tweaks and variations for a host of reasons (unlike a mutual fund or a hedge fund) - this makes demonstrating performance very difficult in terms of regulatory compliance.
Technology has brought transparency to virtually every industry and my friends at Brightscope are committed to bringing it into the FA business as well.
Their latest project involves developing a new standard to help both advisors and their potential clients asses and display the actual results they've delivered.
From Forbes:
We think it鈥檚 time for a single new performance standard for retail financial advisors...
Full disclosure: I am a proud member of the Brightscope Advisory Board.