Communicate Error-Free Investment Results
Are you still using spreadsheets and manual entry to pull performance results and other key data into your marketing and
client presentations? We call this the “last mile” problem—and it may be exposing you to operational, regulatory and reputational
- Human touch points in the “last mile” leave room for error in presenting investment results and other important data.
- Even unintentional errors can raise questions about a manager’s duty of care in providing accurate investment information.
- Regulators are aggressively focusing on accuracy because investors rely on information you present to make crucial decisions.
See below for examples of some operational, regulatory, and reputational risks inherent in the last mile.
See how easy it is to reduce risks in the last mile through automation.
Operational risk includes all errors that can occur in the normal course of doing business, be it setting up new accounts, trading securities,
or generating information for sales purposes. Some examples of common performance-related operational bloopers include:
- Copying return numbers into the wrong return period column. It doesn’t take much to copy a 3-year return number
from a spreadsheet into the 5-year return column in a PowerPoint presentation.
- Failing to include required regulatory disclosures in sales materials.
- Using an existing pitch book as the template for a different strategy presentation. It’s easy to copy-and-paste Small Cap
Growth returns into an existing document but forget to change the benchmark from the original Russell 2000 to the correct
Russell 2000 Growth.
Regulatory and Legal Risk
Unintentional mistakes can creep into marketing materials and invite unwanted regulatory scrutiny. Examples of performance-related
regulatory missteps include:
- If you present 1, 3 and 5-year returns in Q1 and then 1, 3 and 7-year returns in Q2, regulators could deem
it misleading—even if doing so was the result of a cut-and-paste error.
- When sales books, fact sheets and website pages are updated manually, it is easy to inadvertently copy the GIPS
statistics for the Large Cap Value composite into a presentation for the Large Cap Core strategy.
- If a firm unintentionally shows only the top contributors and not the corresponding detractors,
it will be in violation of SEC regulations.
If prospective clients see errors in marketing materials, or if regulators take note of these mistakes, it will affect the firm’s
brand and reputation. For example:
- If a PM or sales professional notices that the displayed benchmark is wrong while in the midst of a presentation,
it can throw them off and impede their ability to tell an effective story.
- Worse yet, if a trustee or consultant in the audience notices the error, it can lead to a series of embarrassing questions
that are sure to derail a well-thought-out presentation.
- The worst case is when the client notices, but doesn’t say anything. In this situation, the manager loses the business and never knows why.