#2 Advisory-Only Assets

Assets which the FIRM provides investment recommendations for but has no control of implementation and trading. Click to Tweet

Full Definition

This term is defined as Assets for which the FIRM provides investment recommendations for, but for which the FIRM has no control of implementation of investment decisions and no trading authority for the assets.” in the GIPS 2020 Exposure Draft.

Key Points about This Term

  1. This term is fundamentally not new as it has been used in the discussion section of Fundamentals of Compliance with respect to the determination of Total Firm Assets (0.A.13) in the 2010 edition of the Standards
  2. What has been added is its formal recognition as a term plus its formal expression as ‘Advisory-Only Assets’ instead of ‘…assets within advisory-only relationships’ expression for it in the 2010 edition of the GIPS
  3. Fun Fact – It appears nine (9) times in the Exposure Draft, excluding its appearance in the definitions and executive summary.
  4. Possible Evolution under new Standards – It is possible that Firms may be able to present Advisory-Only Assets in GIPS Reports, whether separately or included as part of Total Firm Assets (Exposure Draft 2.A.1b and 4.A.8).