Good Risk Governance Pays

Good Risk Governance Pays

Investment Best Practices | Risk Management | Valuation

Excessive Fee Litigation and Public Pension Plans

Posted in Disclosure and Transparency, Fees, Investment Management, Pension, Private Equity, Susan Mangiero

where does all money go?

Having just returned from a two-day ERISA litigation conference in Chicago, the topic of fee benchmarking is top of mind. During a rousing session about excessive fee allegations, plaintiffs’ counsel Greg Porter (partner with Bailey Glasser LLP) and defense counsel Eric S. Mattson (parter with Sidley Austin LLP) discussed fiduciary litigation, the Exclusive Benefit Rule, the concept of “reasonableness,” revenue sharing and much more. What is clear is that this type of dispute between plan participants and sponsors (and their service providers) is likely to show up with increased frequency and extend to other types of employers such as cities and states that provide retirement benefits to their workers. Although municipal plans have not yet squared off in the courtroom against unhappy employees who assert that they are paying too much in fees, recent headlines portend change.

Claims in an April 9, 2015 press release from New York City Comptroller Scott M. Stringer document a concern about the adverse impact of “high fees and failures to hit performance objectives” that “have cost the pension system some $2.5 billion in lost value over the past decade.” According to “The Impact of Management Fees on Pension Fund Value,” a ten-year “healthy” gross rate of return of 6.5 percent is actually smaller by $2.5 billion when vendor compensation is taken into account. Based on the data considered, private equity has been the largest drag on performance with total value subtracted in the amount of nearly $2 billion.

In Pennsylvania, Governor Tom Wolf is bent on closing a $50 billion pension deficit by taking actions such as lowering costs. A renegotiation of $662 million in fees paid to investment managers by its biggest state retirement systems, the Pennsylvania School Employees’ Retirement System and the Pennsylvania State Employees Retirement System, could save money and put the plans on more of an equal footing with the national average of fee levels. See “Gov. Wolf thinks pension funds paying too much in fees” by Len Boselovic (Pittsburgh Post-Gazette, April 12, 2015). Others point to an anemic contribution rate as the culprit. In “The Annual Required Contribution Experience of State Retirement Plans” (March 2015), National Association of State Retirement Administrators (“NASRA”) researchers Keith Brainard and Alex Brown categorize New Jersey and Pennsylvania as outliers due to their “notably” low Annual Required Contribution (“ARC”).

Although a few years old, a database at presents state-specific information about change in dollar assets and management fees. Refer to “Are State Pension Funds Paying Wall Street Too Much?” by Mike Maciag (Governing, August 15, 2012). A report by the Maryland Public Policy Institute examines its experience relative to that of other state retirement plans with a specific focus on whether Wall Street advisors should charge less by eschewing actively managed strategies and adopting a passive approach instead. Click to read “Wall Street Fees, Investment Returns, Maryland and 49 Other State Pension Funds” by Jeff Hooke and John J. Walters (July 2, 2013).

Disclosure of said fees is another component of the ERISA litigation world and will surely be part of municipal lawsuits as well. In its February 18, 2015 no-action letter, the U.S. Securities and Exchange Commission (“SEC”) informed non-ERISA plan sponsors about its reporting obligations in order to avoid compliance mishaps relating to Rule 482 of the Securities Act. Each investment vendor to a reporting entity such as governmental and other non-ERISA sponsors of 457(b) deferred compensation plans, 403(b) plans and church 401(a) plans must agree in writing that it will “provide the DOL required investment information on each investment option it offers under the particular non-ERISA plan, as well as the respective fee and expense information…” on a regular basis. Click to read the SEC letter to the American Retirement Association.

Having worked as an economic expert on fee cases for plaintiffs’ counsel as well as defense counsel (depending on the matter at hand) and having carried out various research projects as a fiduciary consultant, my take is that these cases are seldom simple. Fee arrangements can reflect bundled services that must be thoroughly understood as part of the benchmarking exercise. An asset manager’s fee may be higher than another fund that generates a similar historical return because that investment company has implemented robust risk management technology or otherwise put in place protective mechanisms that are meant to protect institutional investors (and by extension, their beneficiaries). The key to unlocking fee “truth” is to examine a variety of facts and circumstances and then seek to compare vendor compensation levels against those of real peers.

In anticipation of further “excessive fee” cases that allege bad practices on the part of ERISA and non-ERISA plans, the industry will no doubt spend considerable time on what levels make sense and why.

New York City Comptroller Urges New Fiduciary Rules

Posted in Broker Dealers, Compliance, Fiduciary Liability, Investment Management


In a March 25, 2015 press release, Mr. Scott M. Stringer laid bare the details of his plan to “enact a state law requiring that financial advisors disclose whether they put their own financial interests above those of their clients.” In support of his desire for an expanded fiduciary standard to be implemented across the United States, he released a study that (a) chronicles the history of fiduciary responsibilities (b) discusses the downside of relying on the suitability standard and (c) summarizes how reform should occur.

According to “Safeguarding Our Savings: Protecting New Yorkers Through the Fiduciary Standard” (March 2015), fine print communications are insufficient and must be replaced with understandable disclosure language “so that prospective clients know of potential conflicts of interest and to what party the advisers hold their ultimate allegiance.” The concept of suitability is debunked. Authors of the study add that the status quo could result in a bigger price tag for investors. Advisors may direct clients to funds that have higher fees than comparable offerings or encourage rollovers that entail transaction costs. Even when a more costly choice makes sense, the return to an investor will be impacted accordingly.

Time will tell if New York City and other states succeed in implementing an expanded fiduciary standard, ahead of federal regulators. Certainly this announcement gives financial advisory firms further fodder for expanding compliance teams.

Homework and Investment Compliance Liability

Posted in Compliance, Investment Management

Have You Done Your Homework Concept

I almost fell off my chair the other day when the newscaster announced that homework would be banned for at least one New York city school. It seems that I am not alone. According to “Parents outraged after Manhattan school principal dumps homework for more playtime” (New York Daily News, March 6, 2015), critics decry this decision. One father asserts the importance of homework as a way to instill discipline for his daughter. A mother of two children at P.S. 116 asks that assignments be given to her daughters so that they don’t spend any free time in front of the television. Citing “lack of time for other activities and family time and, sadly for many, loss of interest in learning,” the principal of this pre-K through fifth grade public school is said to have ordered teachers to stop giving out math problems and requiring essays.

No doubt this debate will continue, with parents, researchers and policy-makers weighing in about the pros and cons of doing work that (gasp) is going to be graded or otherwise assessed. Notwithstanding the controversy about whether home makes sense, how much and at what age, my fear is that young people will simply not have the requisite skills to earn a decent living and compete with others around the world for work that increasingly requires complex problem-solving abilities. Having taught economics and finance at the university level for nearly a decade, I know firsthand that legions of students are ill-equipped for college. Basic skills such as writing and doing simple math without a calculator are out of bounds for too many people. Results of a November 2014 survey conducted by Achieve, Inc. and entitled “Rising to the Challenge: Are High School Graduates Prepared for College and Work?” cast a shadow over prospects for a widespread creation of a well-educated and employment-ready workforce. If true that students graduate with big gaps between what they know versus what they should know, companies and governments will have to pick up the slack by paying for remedial training. More specifically, shareholders and taxpayers will be footing this expensive bill to fill the void in areas such as:

  • “Work and study habits
  • Oral communications/public speaking
  • Doing research
  • Science
  • Applying what [a student] has learned to solve problems
  • Mathematics
  • Writing
  • Computer and technology skills
  • Reading and understanding complicated materials.”

Notably, a whopping eighty-seven percent of those persons questioned as part of this survey said “they would have worked harder if expectations had been higher.” It’s not a stretch to link higher expectations to homework requirements and teachers urging their students to read, write, calculate, practice, study hard and understand what is at stake. Without a good-paying job, the pursuit of other life dreams is challenging.

None of these findings can be good news for the investment management industry. At a time when global regulations are increasing and the effectiveness of a fund’s compliance team (assuming one exists) is being scrutinized, it is paramount that talented and capable individuals are available for hire. Additionally, it is critical that an asset manager, broker-dealer, bank, consultant and their institutional investor clients (i.e. buyers of investment services) be able to document that adequate due diligence has been carried out. Call it homework for the money set and you get the idea. Preparedness is key and that necessarily means doing enough research to make an informed decision and revise thereafter as needed. Famed NFL star Merlin Olsen cautioned that “One of life’s most painful moments comes when we must admit that we didn’t do our homework, that we are not prepared.”

Let’s hope that skipping post-class assignments is a short-lived trend.

More About Fiduciary Outsourcing

Posted in ERISA, Fiduciary Liability, Pension

Charles Humphrey Esquire

In an earlier commentary entitled “Fiduciary Outsourcing Considerations” (March 4, 2015), I talked about the expectations gap that arises when “a plan sponsor thinks that certain activities are going to be done by a fiduciary adviser, but the fiduciary adviser does not believe they are obliged to do such work…” I mentioned the work of the ERISA Advisory Council and its report about “Outsourcing Employee Benefit Plan Services.”

In reply, ERISA attorney Charles G. Humphrey wrote to me, wanting to let readers know about what he believes is extremely important. A principal of Law Offices of Charles G. Humphrey, he writes the following: “There is a nugget buried in your description of the Report that needs to get more attention than it has to date. This is the Council’s recommendation to DOL to clarify the legal framework for outsourcing. The clarification sought relates to the general fiduciary and co-fiduciary liabilities of the ‘appointers’ in relation to their appointees. As old as ERISA is, many of these questions do not yet have clear cut answers. Plan sponsors need to be sensitive to these questions and act defensively, especially as they move to more encompassing 3(16) arrangements where plan administrator responsibilities normally residing in sponsors are outsourced to third party professionals.”

Interested readers can click here to learn more about “A Guide to ERISA Fiduciary Responsibilities” by Charles G. Humphrey, Esquire. For information about ERISA Section 3(16) tasks, click here to read an article from the National Society of Compliance Professionals.

Heroism in Business and Politics

Posted in Banking, Compliance, Ethics, Governance, Regulation

Bold Hero

Coincidentally, two lectures I attended this weekend focused on the concept of heroism, individual rights and integrity. Although the speakers drew from different historical events, their interesting anecdotes about people who made a difference offer important lessons for modern time decision-makers.

In “The Heroic City: New York As A Microcosm of America (March 7, 2015), Robert Begley talked at length about the formation of New York City and the leading lights who contributed to its reputation as a center of banking and trade. President of the New York Heroes Society, author and public speaker, Mr. Begley singled out Alexander Hamilton as his top choice for the most important contributor to what was formerly known as Mannahatta or the island of many hills. Forced to work for his economic survival as a young boy, this man of conviction was instrumental in creating a monetary system to help a young United States repay federal war bonds and thereby pave the way for prosperity without debt. Notably, his many accomplishments as George Washington’s right hand man, first head of Treasury and founding father are showcased in a soon-to-be Broadway musical called Hamilton – based on the best-selling biography by Ron Chernow.

Separately, on March 8, 2015, Charles Slack enthusiastically described the cauldron of post-Revolutionary War politics that had lawmakers tussling over immigration, policy discourse and chilling legislative mandates such as the Sedition Act of 1798. In his new book, “Liberty’s First Crisis: Adams, Jefferson, and the Misfits Who Saved Free Speech” (March 2015), this award-winning author explains how President John Adams and like-minded persons pushed for jail time and fines to silence critics. The good news is that a groundswell of popularists pushed back hard (and sometimes at great personal expense) for reform, resulting in a non-renewal of this and other punitive laws. As an aside, Mr. Slack penned Hetty: The Genius and Madness of America’s First Female Tycoon and Noble Obsession: Charles Goodyear, Thomas Hancock, and the Race to Unlock the Greatest Industrial Secret of the Nineteenth Century.

While we could talk at length about what heroism means and why it is important to ponder on a regular basis, I am glad for the dual reminders that the power of one is real, actions count and integrity is important. Applied to the subject of this investment compliance blog, I invite readers to consider the notion of heroism and investment stewardship. Doing the right thing with other people’s money has a big impact in a positive way.

Fiduciary Outsourcing Considerations

Posted in ERISA, Fiduciary Liability, Investment Management, Regulation

Outsource Hire Buttons Show Subcontracting Or Freelancing

Plan Sponsor contributor, Judy Ward, takes a hard look at what many believe is a growing trend to outsource certain activities by retirement plan fiduciaries. A central theme in “Fiduciary Outsourcing Options” (February 2015) is that buyer and seller must be clear about the scope of work and document the agreement accordingly. This conversation importantly starts with a decision by a plan sponsor as to what fiduciary duties it seeks to delegate to consultants, asset managers and other types of advisors (to the extent legally allowable). By extension, this means that a plan sponsor should take inventory of resident skills, how much it can afford to spend on full-time employees versus contractors and whether there is a comfort level to perform certain tasks on its own. Notable quotes from “Fiduciary Outsourcing Options” include the following:

  • “Searching for an outside fiduciary ‘is an exercise in risk management…A sponsor should consider many factors about a fiduciary outsourcer’s capabilities…” (Dr. Susan Mangiero)
  • “An outsourcing provider should welcome a sponsor’s questions and lend support for its thorough due-diligence selection process…the sponsor and outsourcer should discuss how their communications would work once the relationship starts.” (Attorney Kim Shaw Elliott)
  • “Not all companies promoting themselves as outsourced fiduciaries have the same ability to meet those responsibilities…You really have to look at their experience.” (Attorney Ary Rosenbaum)
  • “There can be a disconnect between what the outsourcer promoted that it will do and what the contract actually says the outsourcer will do.” (Mr. Ronald Hagan)
  • “Being a fiduciary means you need to have a prudent process. You have to have a basis and a rationalization for making the decision.” (Attorney David Levine)
  • “If a plan sponsor thinks that certain activities are going to be done by a fiduciary adviser, but the fiduciary adviser does not believe they are obliged to do such work, there is an expectations gap.” (Dr. Susan Mangiero)

Based on my experience, there are a lot of ways to get things wrong. My view is that the Request For Proposal (“RFP”) process to select an outsourced fiduciary entails education and feedback from ERISA (or public pension plan) counsel, prior to signing on the dotted line. Understanding that there are different kinds of fiduciaries is one aspect. Plan sponsor decision-makers are charged with monitoring delegates. This means that buyers must have a good sense as to how to best benchmark a service provider, once hired.

Nuts and bolts of contracting are addressed in “Expert Q&A on Outsourcing Fiduciary Investment Responsibilities” (Practical Law, February 2014) by Attorney David Levine and Attorney Allison Tumilty. Also check out “Outsourcing Employee Benefit Plan Services” (ERISA Advisory Council, 2014). Note the recommendations that the U.S. Department of Labor: “(A) educate plan sponsors on current practices with respect to outsourced services; (B) clarify the legal framework under ERISA for delegating responsibility to service providers; (C) provide additional guidance on the duty to select and monitor service providers; (D) facilitate the use of multiple employer plans and similar arrangements as a means of encouraging plan formation and easing administration burdens: and (E) update and provide additional guidance on insurance coverage and ERISA bonding of outsourced service providers.”

Service providers have a golden opportunity to stand up and deliver help to prospective and existing retirement plan clients as they explore the use of outsourced fiduciaries. Building and maintaining a fiduciary outsourcing relationship can be complex and the professional liability is real. It is important to exercise care at the beginning and thereafter.

ERISA Litigation Conference Addresses Timely Fiduciary Issues

Posted in ERISA, Governance, Litigation, Pension, Regulation

ACI ERISA Litigation Banner Chicago 2015

Dr. Susan Mangiero announces the sponsorship of a forthcoming conference about ERISA litigation and regulatory issues by Fiduciary Leadership, LLC. Produced by the American Conference Institute (“ACI”), this mid-April event pairs attorneys (including corporate counsel) with jurists to address timely topics that include, but are not limited to, the following:

  • Excessive fees;
  • Church plan lawsuits;
  • Fiduciary liability insurance;
  • Use of independent fiduciaries;
  • Enforcement risk;
  • Ethics;
  • Employee Stock Ownership Plan (“ESOP”) litigation;
  • Proceedings related to company stock in ERISA plans; and
  • Health care mandates and related compliance.

Interested readers of can read more about the program, speakers and venue by downloading the ERISA litigation conference brochure. There is a $200 discount off the current price for any blog reader who calls 888-224-2480 or visits

I look forward to seeing you in the Windy City in a few weeks. With the just announced push by the White House for fiduciary conflict of interest rules, U.S. Supreme Court activity in Tibble v. Edison International and news of multi-million ERISA litigation settlements, this conference is expected to be informative and important.

QPAM Exemptions For Money Managers Being Evaluated

Posted in ERISA, Regulation


For those who missed “Financial Firms as ERISA Plan Sponsors: The When, What and How of the QPAM Audit Requirement” on May 1, 2013, click to learn more about the Qualified Plan Asset Manager exemption and what it means to asset managers. Slides from this webinar – featuring ERISA attorney Howard Pianko (Seyfarth Shaw LLP), ERISA attorney Mary Alcock (Clearly Gottlieb Steen & Hamilton LLP) and Dr. Susan Mangiero (Fiduciary Leadership, LLC) – can be helpful to anyone seeking to stay abreast of current news about QPAM status scrutiny.

In “DOL feeling heat on QPAM exemptions” (January 26, 2015), Pensions & Investments reporter Hazel Bradford explains that the U.S. Department of Labor “is under increasing pressure to get tough on money managers with U.S. retirement plan clients when their firm, or an affiliate, gets into legal trouble.” Far from being a theoretical construct, Credit Suisse Asset Management stands to lose revenue if it cannot maintain its QPAM status for more than $2 billion of ERISA assets. A November 14, 2014 DOL press release announced a January 15, 2015 hearing about whether a temporary grant of QPAM status should be revoked or made permanent “after Credit Suisse’s guilty plea to one count of conspiracy to engage in tax fraud…” See “Testimony to be heard on the status of related firms and affiliates as Qualified Professional Asset Managers.”

Ahead of the meeting, a letter was sent to the DOL on U.S. House of Representatives, Committee on Financial Services letterhead, urging this retirement plan regulator to “consider adding a prospective employee restriction banning Credit Suisse QPAMs from hiring any employees who have been or who subsequently may be identified by Credit Suisse or any U.S. or non-U.S. regulatory or enforcement agencies as having been responsible for the criminal conduct in any capacity.” Click here to read the full letter. Wall Street Journal reporter John Letzing writes that a bank spokesperson describes the issues as having occurred in the distant past and “has worked hard to uphold the highest standards in the industry, and where we have fallen short, we have accepted responsibility and have addressed the issues.” See “Credit Suisse’s ‘Too Big to Bar’ Hearing Slated for Tomorrow” (January 14, 2015). In granting a temporary waiver a few months ago, the DOL expressed a desire to “avert possible disruptions in retirement plan investments that would be detrimental to the financial well-being of individuals saving for retirement, or pensions.”

In my experience as someone who has co-created a QPAM audit product, some asset managers seem to have taken the path of most resistance and quickly shut down discussions as a way to avoid someone taking a close look at practices. Others with whom I have spoken about the QPAM audit are focused on full compliance. Given the variability in QPAM awareness, it might be extremely helpful to have QPAM audit results made public. Not only could ERISA plan participants review the results but investment fiduciaries could examine the audit reports as part of their due diligence, both prior to hiring an asset manager and then regularly thereafter.

Whatever happens, most people seem to agree that the QPAM exemption-granting process is important but complex. As a senior legal ERISA professional, Howard Pianko has it right when it says that “The DOL is facing a difficult decision.”

Assessing the Cost of Prevention

Posted in Risk Management

Snowman family

In anticipation of what the media has been describing as the worst blizzard in the history of the Northeast, I scurried to buy firewood, extra batteries, matches, bottled water, blankets and non-perishable food. I cooked ahead of time in case we lost power. I regularly boiled water and stored it in a large thermos. Somewhat amusingly, my husband George went about his work, commenting that my outlays and extra efforts seemed unnecessary and would result in wasting time and money. He went on to say that we could survive for a long time on very little and did not have to prepare, elaborating that some have lasted through storms, hurricanes and getting lost in the woods.

Notwithstanding a few chuckles we shared about our clear differences in getting ready for inclement weather, this duality of risk perception and related mitigation activity can be an advantage for investment managers and its institutional investor clients. In “Why the Most Successful Leaders Find a Yin for Their Yang” (July 31, 2012), Forbes contributor Mike Maddock describes the need for operation (and I would add compliance) gurus to encourage innovators and rainmakers to focus on details as they make their magic. He adds that creative types “are usually impotent on their own” and “need a partner to leverage their superpowers and eliminate their blind spots.”

Based on my experience, there is often a tug of war that repeats itself. Traders get told by risk managers to curtail positions. Product developers are urged by the Chief Compliance Officer to modify any features that could violate existing rules. As I wrote in “Life in Financial Risk Management: Shrinking Violets Need Not Apply” (AFP Exchange, Association for Financial Professionals, July/August 2003), “…a good risk manager is persistent, diplomatic, creative, knowledgeable and thick skinned.” Somebody has to be able to say “no” with crumbling under pressure as naysayers push back. As we experienced firsthand in 2008 and 2009, bad things can happen and being ill-equipped to respond can be a death knell for a company.

In “Strengthening Enterprise Risk Management for Strategic Advantage” authors of a COSO study point out that “Times of economic crisis often generate significant discussion and debate surrounding risk management in all types of organizations, with particular emphasis on the role of the board of directors in strategic risk oversight.” Absent evidence that advanced planning took place, board members could be further scrutinized and perhaps even sued. Waiting until the last minute to react might that a problem can no longer be solved, certainly at an affordable level.

Not every risk is material. There is a cost to prevention and a critical assessment must be made to balance costs and expected benefits of managing risk. In “Risk Management Top Concerns” by Dr. Susan Mangiero (November 28, 2014), a list of effective risk avoidance steps includes the use of a risk map. With this tool, one can categorize uncertainty events by likelihood of occurrence and associated dollar impact, if realized. A danger is to underestimate the seriousness of an adversity, especially one that is predicted to come true.

A single snowstorm may not destroy enterprise value but a dramatic contraction in credit availability, a spike in commodity prices or any other type of seismic market shift could be ruinous. For now, I will stick with my “worst case” philosphy and plan accordingly.

Emoticon Compliance – Investment Management “No No”

Posted in Compliance, Investment Management

Vector Smile Icon Set

If you are like me, you probably have one of those magnets hanging on your refrigerator that lets you choose your mood for the day. If you have a smart phone, you can download a wide array of emoji or emoticons to spice up your word bursts with snappy images. While sending smiley face instant messages to friends can be fun, texting and quick hellos could be setting a bad precedent if shortcuts and ambiguous communications replace the kind of clear directives that are vital to effective investment compliance.To those who assert that “txting” enhances creativity and encourages young people to write, I respond “Who cares? That won’t help investors or their asset managers who have to understand policies and procedures before they can follow them.

In my work as a testifying expert, I can’t tell you how many hours are spent trying to decipher poorly written documents that include investment policy statements, compliance manuals and performance reports. Even individual declarations about cornerstone concepts such as “risk” can mean different things to different people. This duality can in turn lead to unintended deviations in desired portfolio goals.

There are lots of examples that tie bad writing to adverse outcomes. Here are a few.

  • The author of a compliance policy writes a memo about trading limits with long positions in mind but is silent on this specific metric. An individual inadvertently breaches the limit because he reads the memo and wrongly interprets “risk” as relating to net buys and sells versus only longs.
  • A pension fund allocates money to a hedge fund and then puts that investment in the equity bucket instead of the alternatives bucket because scant guidance exists as to what belongs where. As a result, the integrity of benchmarking against a customized index that assumes proper characterizations may be compromised.
  • A contract between an endowment and its advisor includes ill-defined terms such as “approve” or “risky.” A loss occurs and one party cries foul that the “bad” investment was unauthorized.

The brevity associated with social media interactions can be a curse when adopted for investment compliance purposes. Let’s say that an asset manager spends money on structured products that are hard to value. If there are no in-depth instructions about what kind of pricing model to use, let alone the exact nature of data to use as inputs, chances are that calculated marks are going to be either too low or too high. Should that happen, decisions about hedging, adhering to a target asset allocation mix or seeking to avoid paying excessive fees could be made on the basis of inaccurate information.

Conveying information in a straightforward fashion is recognized by regulators as important. A few years ago, the U.S. Securities and Exchange Commission (“SEC”) modified its rules to push investment advisers to use “plain English” in writing the brochures that get distributed their clients. Fees, type of services offered and “[m]ethods of analysis, investment strategies, and risk of loss” are a few of the items that must now be communicated in a clear and concise fashion. There is no place for LOL or IMHO in a communique that is intended to educate and enlighten.

A challenge for employers in the investment industry is to find and then hire competent compliance professionals who can write well. According to “Grammar Purists: Why These Companies Won’t Hire Bad Writers” (February 5, 2014), Bruce Watson laments the state of lousy grammar, jumbled thoughts and inappropriate tone. In “Demand for Compliance and Risk Skills Leaves a Talent Shortage” (Deloitte Insights, August 13, 2014), the point is made that too few experienced persons challenge boards to realize their priorities of creating (and abiding by) high-quality enterprise risk management systems.

The upshot is that effective investment compliance critically depends on being able to understand policies, procedures, guidelines, standards, mandates, restrictions and regulations. If what is written on paper is unclear, opaque, incomplete and/or inaccurate, trouble may lie ahead.

If you embrace this concept and recognize the importance of being clear in your intent, join the club and fight for good writing. Until then, TTYL.