The Spaulding Group, the leading performance measurement service
firm in the money management industry, today announced the launch
of the "Custodian Guidelines for Transparency in Benchmark Cost" in
partnership with BNY Mellon, State Street and Northern Trust. The
"Guidelines" were developed with the goal to improve transparency
on embedded fees for benchmark data, and enable investors to make
informed decisions by understanding the details behind the fees
they are paying.
"The ever-increasing cost of benchmark data has been an issue
that has grown in importance every year. It has been a major theme
of our Performance Measurement Forums, and a hot topic of
discussion at our annual Performance Measurement, Attribution and
Risk conferences and in our surveys," said David Spaulding, Founder
and CEO of The Spaulding Group.
The Spaulding Group worked closely with three participating
custodian banks to create a set of principles that the industry
should abide by in order to increase awareness of the costs
associated with indexes. This list of best practices is designed to
lead to further efficiencies in the asset management industry by
ultimately lowering fees paid by end-clients, predominantly asset
owners.
The list of key principles which will be implemented over time
by each custodian are as follows:
- Provide transparency to end-clients on the relative cost of
benchmarks
- The total cost of using benchmark data may also be taken
into account, including index provider licensing fees, and the
resources involved to collect and process the related files and
data
- Conduct a free customized benchmark cost analysis upon request
from clients that would demonstrate the relative cost of benchmark
data options.
The environment for licensing the use of benchmark data
continues to become more complex, while the costs of that data keep
rising. Providing transparency to our clients will help them
understand the associated costs of their benchmark selection
decisions which are required to monitor and analyze their
investment portfolios," said Samir Pandiri, BNY Mellon executive
vice president and CEO of Asset Servicing.
"We are focused on ensuring that clients have access to the
tools necessary to make informed decisions," said Brian Downer,
senior vice president and head of Global Product and Platform
Solutions within State Street Global Services. "This
initiative will help our clients better understand the costs
associated with benchmark data and its impact on their portfolio."
"Enhancing transparency on fees for benchmark data is an
integral part of our commitment to client service," said Fiona
Horsewill, global head of product and strategy at Northern Trust.
"Every basis point counts, particularly in an increasingly
competitive investment management marketplace and the guidelines
will enhance our clients' ability to capture investment
opportunities while managing risks and costs."
In conjunction with the adoption of the "Guidelines," Nasdaq has
agreed to license its NASDAQ Global Index Family at no cost to
custodian banks that abide by the guidelines set forth by The
Spaulding Group and will be offered by BNY Mellon, State Street,
and Northern Trust as a low-cost reporting option.
Banks can join by publicly acknowledging they will abide by the
principles that have been outlined.
"As the industry examines the fees associated with benchmarks,
Nasdaq is focused on providing low-cost indexes that span
geographies and asset classes," said John Jacobs, Executive Vice
President, Global Information Services at Nasdaq. "We are excited
to offer our Global Index Family to these custodian banks, as they
work to increase transparency on the cost of index data. We applaud
the work done by The Spaulding Group, BNY Mellon, State Street, and
Northern Trust to bring this key issue to the forefront of the
asset management industry."
A whitepaper focused on benchmarks will appear in the Spring
issue of The Journal of Performance Measurement, co-authored by The
Spaulding Group, BNY Mellon, State Street and Northern Trust.
For more information on the Spaulding Group's "Guidelines for
Transparency in Benchmark Cost" and full transcript of the
custodian bank interviews, please go to:
http://spauldinggrp.com/benchmark-costs/
About State Street Corporation
State Street Corporation (NYSE:STT) is one of the world's
leading providers of financial services to institutional investors
including investment servicing, investment management and
investment research and trading. With $28.47 trillion in assets
under custody and administration and $2.42 trillion* in assets
under management as of September 30, 2014, State Street operates in
more than 100 geographic markets worldwide, including the US,
Canada, Europe, the Middle East and Asia. For more information,
visit State Street's web site at www.statestreet.com.
* Assets under management include the assets of the SPDR® Gold
ETF (approximately $30 billion as of September 30, 2014), for which
State Street Global Markets, LLC, an affiliate of SSgA, serves as
the distribution agent.
About BNY Mellon
BNY Mellon is a global investments company dedicated to helping
its clients manage and service their financial assets throughout
the investment lifecycle. Whether providing financial services for
institutions, corporations or individual investors, BNY Mellon
delivers informed investment management and investment services in
35 countries and more than 100 markets. As of Sept. 30, 2014, BNY
Mellon had $28.3 trillion in assets under custody and/or
administration, and $1.6 trillion in assets under management. BNY
Mellon can act as a single point of contact for clients looking to
create, trade, hold, manage, service, distribute or restructure
investments. BNY Mellon is the corporate brand of The Bank of New
York Mellon Corporation (NYSE:BK). Additional information is
available on www.bnymellon.com or follow us on Twitter
@BNYMellon.
About Northern Trust
Northern Trust Corporation (Nasdaq:NTRS) is a leading provider
of asset servicing, fund administration, asset management,
fiduciary, and banking solutions for corporations, institutions,
families, and individuals worldwide. Chicago-based Northern Trust
has offices in 19 states, Washington, D.C., and 20 international
locations in Canada, Europe, the Middle East and the Asia-Pacific
region. As of September 30, 2014, Northern Trust had assets under
custody of US$5.9 trillion, and assets under investment management
of US$923.3 billion. For 125 years, Northern Trust has earned
distinction as an industry leader in combining exceptional service
and expertise with innovative products and technology. For more
information, visit www.northerntrust.com and follow us on Twitter
@NorthernTrust.
About The Spaulding Group
With offices in the New York City and Los Angeles metropolitan
areas, The Spaulding Group, Inc. is the leader in investment
performance measurement products and services. TSG offers
consulting along with GIPS and non-GIPS verification services. It
conducts operations reviews and software certification as part of
its consulting group. The firm publishes The Journal of Performance
Measurement, a quarterly publication we launched in 1996 and hosts
the Performance Measurement Forum and Asset Owner Roundtable. The
firm also sponsors the annual Performance Measurement, Attribution
and Risk (PMAR) North America and PMAR Europe conferences which are
recognized as the leading performance measurement conferences in
the industry. TSG's Institute of Performance Measurement offers
performance measurement training, including a fundamental's course
on performance measurement, a course on performance attribution,
and two CIPM exam preparation courses.
CONTACT: Contact Media Relations:
Stephen Sobhi
Vice President
The Spaulding Group
732-873-3831
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