74% of Top 100 Global Asset Management Firms Claim GIPS Compliance
We knew our Global Investment Performance Standards (GIPS®) had gained a widespread industry acceptance since their launch in 1999 as a voluntary set of standards based on the fundamental principles of fair representation and full disclosure of performance results. What we didn’t know, until now, was the exact number of firms claiming compliance on a global, regional, or local basis, or amount of assets managed by GIPS-compliant firms.
That has changed thanks to a new requirement that GIPS-compliant firms notify CFA Institute annually. With a full year of data, we now have key information regarding the reach and impact of the GIPS standards. And they’re impressive.
Top GIPS-Compliant Firms Represent More Than $46T of World’s $78T AUM
Seventy-four of the top 100 global asset management firms claimed compliance with the GIPS standards for some or all of their business as of 31 December 2014. Those firms represent 60% (more than $46 trillion) of the world’s assets under management, or AUM ($78 trillion).
Top Firms: Who is GIPS Compliant?
| Global Asset Manager | AUM (in USD billions), 2014 |
|---|---|
| BlackRock | 4652.00 |
| State Street Global Advisors | 2448.00 |
| Fidelity Investments | 2000.00 |
| J.P. Morgan Asset Management | 1744.00 |
| The Bank of New York Mellon | 1710.00 |
| PIMCO | 1680.00 |
| AXA Group | 1552.00 |
| The Capital Group | 1397.00 |
| Deutsche Asset Management | 1263.00 |
| Prudential Financial | 1176.00 |
Analyzing assets under management at the firm level is an effective way to measure the reach of the Standards, and adds perspective beyond just the number of GIPS-compliant firms. While providing AUM is optional, 1,340 firms (more than 82%) chose to disclose this information. Based on the data, firms with assets under $5 billion account for more than 66% of firms that claim compliance with the GIPS standards.
“Widespread adoption among the top 100 global asset management firms reinforces that GIPS compliance, although voluntary, is a competitive necessity. Investors have demanded it — they want transparency to compare and evaluate investment managers, which is essential to restoring public trust in our industry,” says Jonathan Boersma, CFA, head of Professional Standards at CFA Institute.
We also now know that 85% of the firms that notified CFA Institute of their claim of GIPS compliance have been verified by a third party.
Where in the World Are These Firms?
The firm-notification process also has yielded important insights regarding the geographic breakdown of GIPS-compliant firms. Indeed, more than 80% of the firms that claim GIPS compliance are in the Americas region. This reveals an opportunity for stronger outreach efforts in Europe, the Middle East and Africa, and Asia-Pacific regions. CFA Institute has a dedicated staff presence in each of the regions, and this data provides a starting point for conversations with regulators to further promote the benefits of the GIPS standards in regions where it is currently underutilized.
We are confident that the new firm-notification requirement will lead to better communication between CFA Institute and firms that claim compliance with the GIPS standards, and more informed decision-making for all involved, promoting better business.
The GIPS standards are part of a suite of CFA Institute codes and standards that promote high standards of ethics, integrity, and professional excellence. Learn more about the Asset Manager Code of Professional Conduct and other standards that help ensure all investment professionals place client interests first.
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Image Credit: iStockphoto.com: uschools
Your analysis is very well presented. It’s clear that the CFA Institute has gained additional insight into the state of worldwide compliance with the GIPS standards as a result of this new requirement. That said, there is nothing here to indicate what benefits this has provided to the industry and to the clients of these compliant firms, or to clients across the industry. You state that you are confident that this will promote better business, but your study presents no evidence of that, even though this had been one of the major reasons for opposition to this new requirement. It seems the question still remains: “Where’s the benefit to the clients?” Some concrete evidence of the benefits to clients would be welcomed and greatly appreciated within the industry.
Thank you for your comment. This data serves as:
• A resource for investors to easily access a list of firms claiming GIPS compliance,
• Better, direct communication between CFA Institute and firms that claim compliance with the GIPS standards,
• An opportunity for more informed decision-making for firms and the industry in general, and
• Focused outreach efforts in the regions where adoption has not reached potential levels.
The GIPS standards serve to protect investors and our mission to promote the Standards is aimed at the ultimate benefit of the global investment community.
Good day,
are there any detailed data available for Europe (especially for Austria and Germany)?
Tank you!
Good Morning Anju;
Are there any detailed data available for Latin America?
Thank you.
Dear Mr. Osorio,
While firm-specific information is confidential, we will certainly be happy to work with you for statistical information that you would like to see. Please write to us at [email protected] and let us know what statistics related to Latin America you would like to see and we will get them over to you. Thank you.
Are there any firms claiming compliance in Africa? . What has Institute done to promote GIPS compliance in Africa?
Hello Anju,
Is there an updated list of the numbers?
Thanks,
Nitesh