Compliance with the Global Investment Performance Standards (GIPS^®) is an undertaking worthy of commendation. The act of adopting the GIPS standards shows a firm’s significant commitment to doing the right thing. And doing the right thing for the betterment of a larger group is seldom effortless. Thankfully, all the contributions to this self-regulatory standard are not unnoticed or without benefits. Widely recognized as the global standard for investment performance reporting, the GIPS standards offer a competitive advantage and a global passport to firms that support the ultimate benefit of the investment community by subscribing to the principles of fair representation and full disclosure.

The network of compliant firms and other stakeholders both share a strong sense of community bound by the common goals of restoring trust and promoting integrity in the industry. And behind the scenes is a subset of this community that is dedicated to promoting adoption and to helping all firms that claim compliance with the Standards. GIPS Sponsor organizations in more than 40 markets and hundreds of volunteers that comprise representatives from all stakeholder groups, which includes asset managers, asset owners, software vendors, verifiers, and consultants, are constantly working to create and maintain resources that can (1) assist firms in implementing and maintaining GIPS compliance, and (2) create awareness in the industry about the mission of the Standards. CFA Institute is proud to announce the release of two new additions to the slew of resources that are available to firms. These papers have been authored by the United States Investment Performance Committee (USIPC).

For the Due Diligence Consultant: What GIPS Compliance Means

Although the due diligence consultant is the intended audience of this paper, the concepts covered make it a good read for anyone interested in understanding more about what compliance entails. It highlights the fact that this step of achieving GIPS compliance is more than a box-checking activity for firms. It is about maximizing the value to a firm of what the GIPS standards and the underlying internal controls framework have to offer — an improved governance of the performance function. The paper offers due diligence consultants guidance on how to ask the right questions to obtain relevant information and be equipped to make educated and informed decisions.

UMA Portfolios: When the GIPS Standards Apply

Written from the perspective of the investment manager, this paper aims to offer best practices in determining when it is appropriate to include unified managed account (UMA) portfolios in total firm assets or in composites for GIPS compliance purposes. Existing guidance on this subject is currently limited and firms struggle to determine the answers to their questions. The exercise of interpreting the applicability of the Standards is complicated further by the variety of possible scenarios that UMAs can present. Although GIPS 2020, the next big update of the Standards, is vigorously in the works and will strive to address a lot of guidance that may currently be lacking, the release of this new edition is still a couple of years away. This paper offers a step-by-step approach for reviewing the specific scenarios as they relate to the use of UMAs and reaching appropriate conclusions accordingly.

Whether this is a new concept for you or whether you are a seasoned professional with advanced knowledge of the GIPS standards, we encourage you to take advantage of the wealth of resources available on the GIPS website that aim to assist all involved. The website is constantly updated and includes such resources as webinar recordings, archived recordings of sessions at the Annual GIPS conference, interviews, survey findings, white papers, presentation slides, and flyers.

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