CFA recommends Gross of Fees for Presentations?!?!
Hey all,
When I was looking at a family member's defined contribution plan from their employer. I noticed that the presentation material for the mutual fund offerings was EXTREMELY misleading. It was shameful at the level of horrid and misleading presentations by this large institution.
I raised my concern with the employer about the misleading marketing material. One of the areas of concern was that they presented the material "gross of fees" and made no mention of what the management fees were on the marketing material.
I was told that CFA institute recommends that presentations be done "gross of fees". I was shocked to hear this since I always remember "net of fees" as part of my studies when I was going through the exams.
There seem to be two sets of codes regarding fees - Asset Manager Code and GIPS. Asset Manager says to present both gross and net of fees and that the code is voluntary.
I've seen GIPS mention a recommendation of "Gross of fees" but have not found a clear text about whether the requirements to be compliant with GIPS are either "gross of fees" or "Net of fees". It seems odd to me to have two different codes (asset manager code and GIPS) on this by CFAI which contradict each other.
Can anyone give me a clear direction as to whether CFAI's GIPS compliance is based on the requirement of "net of fees" and a recommendation of "gross of fees" or is it some other variation.
The portfolios are mutual funds with the stocks forming the funds.
Thank you in advance,
Deep2002 |