Assets Under Advisement Figures Should Never Mislead Clients, Eric Perelman Tells FundFire

Corporate partner Eric Perelman spoke with FundFire about the ethics of investment consultants calculating their assets under advisement (AUA) by including the assets of clients who have placed the consultant on retainer but not received any services. In “RVK’s Disclosures Raise Questions on How Consultants Calculate AUA,” published on November 3, Eric notes that while investment consultants are not required to disclose changes in AUA, as the figure is unregulated, it is still best practice to inform institutional clients of any methodological changes.

“It's still a disclosure regime. You cannot be misleading. You provide a fair and balanced presentation,” he says. “So the marketing rule would tell you that you can’t just doctor up the AUA figure.”

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