Rates of return for periods longer than one year should be presented on an annualized basis. Returns for periods shorter than one year should not be annualized.
J. If only gross return information is presented to the client, information should be provided to enable the client to determine the impact of the manager's fee.
K. The manager's fees should be presented.
L. At least one appropriate risk measure should be presented.
M. At least one appropriate market index or custom benchmark should be presented as a basis for comparison.
N. The consultant should disclose potential conflicts of interest, relevant business relationships, or other pertinent information that might cause the consultant to have a conflict of interest.
II. MINIMUM RECOMMENDED REPORTING AND DISCLOSURES – REPORTING PERFORMANCE RESULTS TO CLIENTS
Listed below are the minimum recommended reporting and disclosures for compliance with the IMCA Performance Reporting Guidelines regarding reporting performance results to clients.
A. Time-weighted total rates of return should be calculated on at least a quarterly basis, using quarterly asset valuations and monthly transactions.
B. If the investment manager is the source of the portfolio accounting data, this should be disclosed to the client.
C. Annual rates of return for each year should be presented for 10 years or for the period from inception of the firm or inception of the investment product – whichever is shorter.
D. A cumulative return for the period from inception of the firm or inception of the investment product to date should be shown.
E. Rates of return for periods longer than one year should be presented on an annualized basis. Returns for periods of less than one year should not be annualized.
F. Information should be provided to enable the client to determine the impact of the manager's fees.
G. At least one appropriate risk measure should be presented.
H. At least one appropriate market index or custom benchmark should be presented as a basis for comparison.
I. The consultant should disclose potential conflicts of interest, relevant business relationships, or other pertinent information that might cause the consultant to have a conflict of interest.
III. RECOMMENDED ADDITIONAL REPORTING AND DISCLOSURES – MANAGER SEARCH AND ANALYSIS
Listed below are recommended additional reporting and disclosures for compliance with the IMCA Performance Reporting Guidelines regarding manager search and analysis.
A. If sufficient history exists, one-, five-, and ten-year cumulative returns should be presented.
B. Cumulative returns should be shown for each manager from inception of the firm, inception of the investment product, or 10 years – whichever is shorter.
C. Performance composites presented to clients should be shown on both a gross basis (before deduction of the investment manager's fee) and a net basis (after deduction of the investment manager's fee).
IV. RECOMMENDED ADDITIONAL REPORTING AND DISCLOSURES – REPORTING PERFORMANCE RESULTS TO CLIENTS
Listed below are recommended additional reporting and disclosures for compliance with the IMCA Performance Reporting Guidelines regarding reporting performance results to clients.
A. Time-weighted total rates of return should be calculated on at least a monthly basis, using monthly asset valuations and daily transactions.
B. When cash flow in excess of 10 percent of the market value of a portfolio or portfolio segment occurs, and the interim market value is available or can be obtained, interim time-weighted calculations should be performed.
C. Trade-date accounting using accrued interest should be used to calculate returns and valuations.
D. If sufficient history exists, one-, five-, and ten-year cumulative returns should be presented.
E. An internal or dollar-weighted rate of return should be shown for the period from inception of the firm or inception of the investment product to date.
F. Comparative samples should contain portfolios whose performance has been calculated on the same fee basis as the portfolio(s) being analyzed.
G. Gross and net performance should be shown.
Part IV IMCA Disciplinary Rules and Procedures
Glossary
Candidate
Individual who has been admitted to an IMCA program that may lead to an IMCA Designation.
Client
Person or entity who receives professional services from an IMCA Licensee.
CIMA
Certified Investment Management Analyst.
CIMC
Certified Investment Management Consultant.
Code of Professional Responsibility (Code)
A set of statements adopted by IMCA to promote and maintain the highest standards of personal and professional conduct in the investment management consultant profession.
CPWA
Certified Private Wealth Advisor.
Disciplinary Rules and Procedures (Rules)
A set of rules adopted by IMCA to enforce the IMCA Code of Professional Responsibility and Standards of Practice in order to maintain the integrity and goodwill of IMCA designations among members of the financial services industry and the public. The Rules may be amended from time to time.
Good Standing
The status of an IMCA Designation that indicates the Licensee has met and continues to meet all requirements set by IMCA to maintain a license for the IMCA Designation.
Hearing Panel
A panel appointed by the Professional Review Board (PRB) to hear a disciplinary case as more fully described herein. A Hearing Panel shall be composed of three individuals, all of whom hold an IMCA Designation, are IMCA members in good standing, and have held an IMCA Designation for at least two (2) years.
IMCA
Investment Management Consultants Association.
IMCA Appeals Board
Five (5) person board appointed by the IMCA Board of Directors to review and consider appeals from a final order issued by the PRB.
IMCA designation
CIMA, CIMC, or CPWA license.
Licensee
Person who is licensed by IMCA to use an IMCA Designation.
Legal Counsel
A licensed attorney who is retained by IMCA for the purposes of assisting IMCA staff, the PRB, Hearing Panels, IMCA Appeals Board, and the IMCA Board of Directors in implementing the Code, Standards of Practice, and Rules.
Professional Loss or Suspension
Loss or suspension of a professional license, designation, or certification to offer services to the public as a registered securities representative, broker–dealer, insurance agent, real estate sales person or broker, attorney, accountant, investment advisor, or similar professional license, designation, or certification.
Professional Review Board (PRB)
A Board established by IMCA to review, investigate, and rule on any Licensee's alleged infractions of the Code, Standards of Practice, and/or Rules.
Respondent
An IMCA Licensee or a Candidate for an