The problem of 'dressing up' track records by fund managers is getting worse, according to analytics firm Cerulli.

New research from the company suggests some larger fund managers are guilty of putting a gloss on achievements.

"Clarity, or lack thereof, is the issue,” says Tony Griffiths, a senior analyst at Cerulli Associates.

“Investment consultants we interviewed complained that asset managers are submitting back-tested performance data as the numbers of a real fund.

"Another common complaint is that it is not clear whether the numbers in performance data are net or gross of fees."

Griffiths adds that while consultants may be more forgiving of the latter issue, the overriding concern is that some managers are willing to 'fudge' their way to success.

Other issues include sweeping a poorly performing product under the carpet either by changing its name or its mandate, data being changed without explanation between pitch and proposal and managers launching or adapting products based primarily on market demand.

“The last example can be particularly frustrating for asset managers. Many firms feel that investment consultants set moving targets,” Griffiths explains.

“Managers are expected to build products and services based on personal convictions, while at the same time addressing the needs of the consultant; the suggestion being that products can be tweaked, but not tailored--a potentially impossible balancing act. Cerulli has some sympathy for managers in this instance.”

In Europe, particularly in the UK, investment consultants are the gatekeepers to a large number of corporate and public pensions, as well some insurers.

According to an estimate in Cerulli's upcoming 2016 European Institutional Dynamics report, the size of the European institutional investor market stands at more than €16trn (US$18.4trn).

The five largest investment consultants globally advise on approximately US$4.7trn (€4.1trn), one quarter of the European total.

Cerulli does not see the long-running prickly relationship between investment consultant and manager easing anytime soon, especially in the UK where demand for consultant-led fiduciary management services continues to grow and yet fiduciary management performance data is not widely available.

Issues arising from fiduciary management are being reviewed by the UK financial regulator, with the interim results due to be published in mid-2016.

"Cerulli expects the FCA to move toward levelling the playing field, raising the bar for all fiduciary and asset management providers. Not that fund managers will find respite among the UK's advice only regional consultants," Griffiths concludes.