Journal article
Virtual reality? investment consultants’ claims about their own performance
- Abstract:
- Investment consultants market their services by claiming their fund manager recommendations add significant value. Using non-public data sourced from investment consultants and the UK regulator, we find no such evidence, but identify several practices that explain their exaggerated claims: comparisons to benchmarks instead of peers, inclusion of simulated and backfilled returns, use of investment horizons that allow losers to be forgotten, and unexplained exclusions of products from the analysis. Consultants do not fully disclose their methodology to investors, who therefore cannot verify or reliably compare their performance.
- Publication status:
- Published
- Peer review status:
- Peer reviewed
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Access Document
- Files:
-
-
(Preview, Accepted manuscript, pdf, 1.1MB, Terms of use)
-
- Publisher copy:
- 10.1287/mnsc.2021.4218
Authors
- Publisher:
- INFORMS
- Journal:
- Management Science More from this journal
- Volume:
- 68
- Issue:
- 11
- Pages:
- 8301-8318
- Publication date:
- 2021-12-22
- Acceptance date:
- 2021-07-19
- DOI:
- EISSN:
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1526-5501
- ISSN:
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0025-1909
- Language:
-
English
- Keywords:
- Pubs id:
-
1187101
- Local pid:
-
pubs:1187101
- Deposit date:
-
2021-07-20
- ARK identifier:
Terms of use
- Copyright holder:
- INFORMS
- Copyright date:
- 2021
- Rights statement:
- © 2021, INFORMS
- Notes:
- This is the accepted manuscript version of the article. The final version is available online from INFORMS at: https://doi.org/10.1287/mnsc.2021.4218
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