GIPS Compliance by the Numbers

Posted In: Global Investment Performance Standards (GIPS®), Standards, Ethics and Regulations (SER)

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Organizations that claim compliance with the Global Investment Performance Standards (GIPS®) are required to notify CFA Institute of their claim of compliance by submitting a GIPS Compliance Notification Form. This form must be submitted when the organization initially claims compliance and on an annual basis thereafter. A list of all organizations that claim compliance with the GIPS standards is available on the GIPS standards website. Organizations may, however, choose not to be included on this list, and slightly more than 100 organizations have selected this option.

Among the organizations claiming GIPS compliance, CFA Institute differentiates asset managers from asset owners. We do that because in the GIPS standards world, we classify an organization that competes for business as an asset manager, or a “firm.” An organization that manages its own assets and does not compete for business, such as a pension plan or a sovereign wealth fund, we classify as an “asset owner.” Although firms and asset owners follow many of the same principles, there are some differences that necessitate a separate set of standards for firms and asset owners.

TIle for Global Investment Performance Standards (GIPS)

We are often asked for details about the organizations that claim compliance. Here’s what we can tell you about these organizations based on the information they provided on their GIPS Compliance Notifications Forms:

As of 31 December 2023, a total of 1,778 organizations, including 1,757 firms and 21 asset owners, claim compliance with the GIPS standards. These organizations represent 48 markets that we categorize into the following three regions:

Americas: 1,431
Asia Pacific (APAC): 99
Europe, the Middle East, and Africa (EMEA): 248

The five countries with the most organizations that claim compliance with the GIPS standards are:

United States: 1,355
United Kingdom: 87
Canada: 70
Switzerland: 31
Japan: 28

How many organizations choose to be verified is another common question we receive. Verification is a process by which an independent verifier conducts testing of a firm on a firm-wide basis, or an asset owner on an asset owner‒wide basis, in accordance with the required verification procedures of the GIPS standards. Verification provides assurance on a firm’s or asset owner’s policies and procedures for complying with the GIPS standards. While verification is voluntary, the vast majority of organizations that claim compliance have chosen to be verified. Of the 1,778 organizations that claim compliance with the GIPS standards, 1,468, or 83%, have indicated that they have had a verification performed. This percentage is largely driven by the 84% of organizations from the United States that reported they are verified. The other top five markets have percentages ranging from 76% to 89%. Among asset owners, 95% are verified.

Size is where the GIPS standards have the greatest influence. We track the top 100 asset managers globally, as listed in Pension & Investments, to identify those that claim compliance. From the “Megamanagers Special Report,” from Pensions & Investments, we determined that all of the top 25 global asset managers and 85 of the top 100 asset managers claim compliance with the GIPS standards for all or some of their assets.

Although the investment management industry has rapidly consolidated over the past few years, the number of organizations that claim compliance has remained relatively stable. New organizations claiming compliance tend to offset those that merge with other organizations, are no longer in business, or choose to no longer claim compliance.

One final data point: CFA Institute has created a new webpage that features a comprehensive table of firms that employ 300 or more CFA charterholders globally. A large percentage of these organizations claim compliance with the GIPS standards. Of those 48 organizations that manage assets on a discretionary basis, 43, or 90%, claim compliance with the GIPS standards.

The numbers speak for themselves: GIPS compliance matters! To learn more about the GIPS standards, check out the GIPS standards website. We have lots of tools to help you get started. If you have any questions, send them to the GIPS Standards Help Desk at [email protected]. The GIPS Standards Help Desk is standing by, ready for your questions, and ready to point you in the right direction.

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All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

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Tags: GIPS, Global Investment Performance Standards (GIPS), Regulations Standards and Ethics

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About the Author(s)

David Terris, CIPM

David Terris, CIPM, David Terris, CIPM, is a director in the Global Industry Standards department at CFA Institute. He serves as the staff liaison for several GIPS standards committees and has primary responsibility for the GIPS Standards Help Desk. Previously, he worked for 10 years as a verifier, serving as a managing director at ACA Performance Services, LLC, and as a consultant at Vincent Performance Services LLC. Terris has also served as a fixed-income portfolio manager at Northwest Corporate Federal Credit Union and a senior portfolio strategist at USAA, where he worked on the asset management side of USAA’s pension plan. He earned a BBA in accounting from the University of Texas at San Antonio and an MBA in finance from St. Mary’s University. 