The Spaulding Group, the leading performance measurement service firm in the money management industry, today announced the launch of the “Custodian Guidelines for Transparency in Benchmark Cost” in partnership with BNY Mellon, State Street and Northern Trust. The “Guidelines” were developed with the goal to improve transparency on embedded fees for benchmark data, and enable investors to make informed decisions by understanding the details behind the fees they are paying.

“The ever-increasing cost of benchmark data has been an issue that has grown in importance every year. It has been a major theme of our Performance Measurement Forums, and a hot topic of discussion at our annual Performance Measurement, Attribution and Risk conferences and in our surveys,” said David Spaulding, Founder and CEO of The Spaulding Group.

The Spaulding Group worked closely with three participating custodian banks to create a set of principles that the industry should abide by in order to increase awareness of the costs associated with indexes. This list of best practices is designed to lead to further efficiencies in the asset management industry by ultimately lowering fees paid by end-clients, predominantly asset owners.

In conjunction with the adoption of the “Guidelines," Nasdaq has agreed to license its Nasdaq Global Index Family at no cost to custodian banks that abide by the guidelines set forth by The Spaulding Group and will be offered by BNY Mellon, State Street, and Northern Trust as a low-cost reporting option.

Banks can join by publicly acknowledging they will abide by the principles that have been outlined.

“As the industry examines the fees associated with benchmarks, Nasdaq is focused on providing low-cost indexes that span geographies and asset classes,” said John Jacobs, Executive Vice President, Global Information Services at Nasdaq. “We are excited to offer our Global Index Family to these custodian banks, as they work to increase transparency on the cost of index data. We applaud the work done by The Spaulding Group, BNY Mellon, State Street, and Northern Trust to bring this key issue to the forefront of the asset management industry.”

A whitepaper focused on benchmarks will appear in the Spring issue of The Journal of Performance Measurement, co-authored by The Spaulding Group, BNY Mellon, State Street and Northern Trust.

For more information on the Spaulding Group’s “Guidelines for Transparency in Benchmark Cost," and full transcript of the custodian bank interviews, click here. To be contacted by a member of our team, please click here.