This study session consists of three parts. On completion of the video, selected readings and assessment, 2 hours of structured CPD will automatically be entered into your CPD log.

1. Performance Evaluation - Video

Measuring, appraising and attributing performance are core skills for all wealth managers. Having a framework for recognising how a client will react to certain market conditions is critical to building a long-lasting and generational relationship.  This video asks leading practitioners for their views and opinions on:


2. Performance Evaluation - Selected Readings

Four external papers have been selected in this area:

'Performance Measurement and Evaluation' (CFA Institute Refresher Reading, 2014)

Selecting a new fund manager requires both quantitative and qualitative inputs. This reading guides us through a structured review process which considers the various issues facing wealth managers in the task of fund manager selection. Six manager selection criteria are identified.

'The Arithmetic of ‘All-In’ Investment Expenses' by John C. Bogle (CFA Institute, 2014)

This article considers and builds on earlier articles by William Sharpe. It goes beyond the conventionally followed approach of focussing only on expense ratios when looking into the drag on mutual funds. Many of the additional costs faced by investors are described as being ‘invisible’.

'Utilizing Downside Risk Measures' by Michelle McCarthy (CFA Institute, 2014)

This article starts by noting that when we look back at what has already happened to a portfolio then we are considering its performance and the variability of this performance. This will not inform us about any of the risks posed by any changes in the circumstances of the portfolio. The writer then considers the important distinction between backward looking performance variability measures (such as standard deviation and the Sharpe ratio) and forward looking risk measures (such as VaR return on risk-adjusted capital).

Re-thinking Portfolio Management and Measurement Based on Clients' True Financial Goals by Stephen Campisi (CFA Institute, 2014)

The idea of linking client satisfaction to advisor pay has been frequently raised, but significant challenges need to be overcome before it can be widely adopted. This reading seeks to address how client satisfaction can be measured, and examines the nature of measures which can suitably be linked to advisor pay.


3. Performance Evaluation - Structured Assessment

The assessment consists of 10 questions and requires a pass score of 70% to be obtained. The test must be passed in the first two attempts in order to successfully complete this study session and for the learning to log as structured learning. 

Performance Evaluation - Video
Performance Evaluation - Selected Readings
Performance Evaluation - Structured Assessment