Performance

GIPS Marketing Best Practices

The end result of a firm’s efforts when claiming compliance with the Global Investment Performance Standards (GIPS®) is the delivery of a fully compliant presentation to prospective clients. This is often distributed alongside the firm’s other marketing materials. The required statistics and disclosures that must be included in a compliant presentation are clearly listed in published guidance.

White Paper: A Practical Guide to Implementing the GIPS Standards

Compliance with the GIPS® standards is recognized as an industry best practice and has become a de facto requirement, especially in the institutional money management space, in order to stay competitive. A firm’s claim of GIPS compliance facilitates “apples-to-apples” comparisons between investment managers for prospective clients and fosters invaluable client trust.

Is Asset-Weighted Dispersion Right for Your Firm?

A GIPS®-compliant presentation contains a number of required statistics. One such metric is the internal dispersion of individual portfolios within a composite. The GIPS standards do not prescribe a specific methodology (as long as the measure that is selected is applied consistently) and thus many firms struggle with this calculation. The following is a best effort attempt at explaining one option: asset-weighted standard deviation. 

Market Exposure: The Importance of a Comprehensive Compliance Review

In 2002, the Sarbanes Oxley Act was enacted to augment the regulation of accounting and disclosures for public companies. This was in direct relation to aggressive accounting methods, the technology bubble, and other instances of corporate malfeasance. The ensuing financial crisis and market crash of 2007-2009 uncovered a lack of oversight exhibited by numerous Ponzi schemes, as well as negligent lending practices in the real estate mortgage market.

A New Trend in Platforms Requiring Third-Party Performance Attestation

Consultant database reporting is an important business consideration for many investment management firms. The databases serve as a gateway for investment managers to reach institutional and retail assets alike. A recent trend in the industry is that of increased due diligence. The top databases are increasingly requiring firms to meet one of the following requirements:

FAQ: Pitfalls and Best Practices for Presenting Third-Party Performance

More firms continue to be implicated as fallout from the F-Squared Investments, Inc. enforcement action continues. The latest development occurred March 22, when a federal judge ordered that F-Squared founder and former CEO Howard Present personally pay $13 million, including a $1.58 million civil money penalty, following his loss at trial this past October. This is a direct result of the Securities and Exchange Commission’s (SEC) increased focus on how advisers present third-party investment performance.

Is a GIPS Committee Right For Your Firm?

Firms of all sizes frequently ask about the relevance and importance of forming a GIPS® Committee within their organization. Startup firms debate whether a GIPS Committee provides any added value when limited personnel causes constraints on resources. Conversely, well established, global entities often see the added value in having a committee but must weigh the operational burdens involved.

Firm Notification Requirement – 2018 Form Now Available

Firms that claim compliance with the GIPS® standards are required to notify CFA Institute of their claim of compliance. Each firm must submit the GIPS Compliance Form annually by June 30. Any data included in this form must be as of the prior December 31. Firms completing the form currently must include data as of December 31, 2017. Note that the form can be submitted anytime between now and June 30 and is not dependent upon completion of a firm’s 2017 verification.