GIPS: Total firm assets

CFA Level III Portfolio Management
#1

Hoping someone can help clarify the definition of TOTAL FIRM ASSETS.

Total firm assets include all discretionary and non-discretionary assets, but does not include assets assigned to a sub-advisor UNLESS the firm has discretion to select the subadvisor.

My question is, if the firm DOES NOT have discretion over the subadvisor, wouldn’t these assets then be considered as non-discretionary assets which would still fall under “total firm assets” as per the first part of the definition?

Many thanks for the clarification…

#2

Non discretionary accounts must not be included in any composite.

If a firm has no discretion over sub advisor, it is considered as a non-discretionary account and must not be included in any composite.

I think, in the light of GIPS, only assets included in composites are considered as total firm assets.

However, ask Kroki to confirm this.

#3

I understand that non-discretionary assets should not be considered in composites… But Total firm assets as defined by the curriculum does include non-discretionary assets.

Can anyone clarify? Should client-directed assets to a subadvisor be considered as Total firm assets?

#4

if your a subadvisor you can claim the assets and the firm who hired you can claim it as well. a footnote is created for both of the relationship.