Is a firm required to include non-fee paying accounts and non discretionary portfolios in its composites?? Also what exactly is the diff between a discretionary and non-discretionary portfolio?? Any help would be much appreciated
non-fee paying or fee-paying > include only if both fall under discretionary. non-discretionary > exclude With non-discretionary, client makes investment decisions, so you cannot include it in a composite. Composite is based on a particular investment strategy. Investment specialist does not use his/her discretion when allocating assets as they do with discretionary portfolios.
inclusion of non-fee paying discretionary is optional. do a search, there was a huge discussion on this a couple of weeks ago.
I’d still include it to be safe, wouldn’t you Lola?
not necessarily. Just to throw you off, they might say something like, the inclusion of which of the following accounts is mandatory in the construction of a composite? Then you better know that those are optional. With GIPS there’s a bunch of stuff you need to memorize (not a whole lot on the grand scheme of things), so I’d say it’s prudent to spend the time to do so.