We strongly support the overall objectives presented in the Model that seek to provide investors with meaningful and transparent disclosure, recognizing that most investment-based relationships involve some form of providing advice. In general, we believe that use of these categories is a good attempt to correlate the appropriate types of disclosure with the level of advice being sought and provided. The commentary recognizes, however, that a representative and client may be in two relationship types simultaneously, and the “practical difficulties with the same representative wearing two hats with the same client.” In such situations, the commentary suggests that the objectives of the Model will be met if the parties record their understanding in the Fair Dealing Document. However, given the potential liability attached to breaches of this understanding, we ask that the Adopted Rule formally recognize these situations and provide clarification of (or even examples of) the language that should be used in the Fair Dealing Document to satisfy both parties’ obligations.
Overview of the Council’s Comments:
We agree with the statement in the Concept Paper that that are many practical challenges for financial services providers to overcome in order to provide this kind of reporting, and that the required calculation “is inherently complex.” We also believe that the utility of performance information is lost when there is no uniformity in its presentation, and thus no basis for comparability among different asset classes. Given the importance of providing investment performance information in a manner that is credible, uniform, and allows comparability, we strongly suggest consideration of the CFA Institute Global Performance Presentations Standards, which are recognized, relied upon, and accepted around the world.