Chances are that if you claim compliance with the Global Investment Performance Standards (GIPS(R), your GIPS presentations are running out of room. But many GIPS compliant firms like to limit their composite presentations to one or two pages. Over the years, new required disclosures have been added, making this more difficult. Plus, each year comes with it a new line for your returns and other statistics. How do you deal with this?
Reduce the font size on your GIPS presentation
One quick and easy thing to do is to simply reduce your font size. However, you have to be mindful that you can carry this to an extreme: after all, you do want people to be able to read the GIPS presentation without too much difficulty. Providing a magnifying glass with your presentations is hardly the solution. We occasionally hear “beware of the fine print.” Well, if your print is too “fine,” it might be a problem. I think 9 pt. should be the smallest you should use. But even this can be too small, depending on the font type you use, so just be mindful of the readability of your text.
Roll the years off of your presentation
GIPS requires a minimum of five years of returns (or since the inception of the composite, if less than five years), building to ten. What do you do after you reach ten years? Well, you have a choice:
- Keep adding years
- Roll years off
Some firms like to show as many years as they can, and there’s nothing wrong with this. But, if the “real estate” of your paper is getting a bit crowded, you may want to consider rolling years off after some point. While it’s very attractive to roll of the earlier years when returns weren’t so good, firms definitely don’t like doing it when the performance is great, so this should be considered, too. But, it’s an option.
Cut out what you don’t need in your GIPS presentation
Another step involves finding items that you have that you don’t really need. For example, lots of folks include “negative disclosures.” That is, they tell us what they don’t do. For example:
- The composite doesn’t have a minimum
- The strategy doesn’t invest in leverage, derivatives, or short positions
- The composite doesn’t have a significant cash flow policy
- Your timing for adding or removing accounts to/from the composite
- The composite’s inception date
- That you don’t use carve-outs
- That the composite doesn’t include accounts with bundled fees
- That the composite doesn’t include non-fee paying accounts
- Explaining that the 3-year ex post annulized standard deviation isn’t shown because you don’t have 36 months for years prior to 2011.
While this might be nice information, it’s not needed. Why take up space with this?
Become a “wordsmith”
Occasionally people use more words than are necessary: they can still get the message across by being a bit more succinct.
I’m a big fan of the saying that there is no thing as “writing.” Rather, it’s rewriting, rewriting, rewriting. Of course, you eventually get to a finished product, but multiple reviews/edits typically result in better copy. The same applies here. Reviewing the wording to see where improvements can be made is always a good thing.
Perhaps your verifier can help!
Susan Weiner, CFA (@SusanWeiner), a writer-editor and chartered financial analyst (who helps financial professionals increase the impact of their writing on clients and prospects), recently reminded me (via a Twitter post) of a blog post I did in February 2015. Titled “Should GIPS verifiers correct grammar? Selling? Punctuation?” Well, when I conduct a GIPS verification, I typically recommend steps the client can take to reduce the overcrowding of their presentations, too!
Don’t forget the regulator!
Don’t forget that you need to make room for disclosures that your regulator may have. Since GIPS is a global standard, it doesn’t spell out what these items may be, so you need to make sure you’re aware. Your verifier should “clue you in,” though in the end, you own the responsibility to make sure whatever is required is present, too.
Other ideas to free up space on your GIPS presentation?
If you have other ideas, please share them! Just send me a comment. Thanks!