Common Practices of GIPS®-Compliant Firms
A firm that claims compliance with the Global Investment Performance Standards (GIPS®) has many decisions to make regarding the policies it uses to attain and maintain compliance with the GIPS standards. Each firm has unique circumstances that must be factored into decisions about policy creation. The types of strategies a firm manages, its performance calculation systems, and internal resources are just a few of the factors that should be considered for each policy decision. Many of our clients contact us when they are considering implementing a new policy or changing an existing policy. The most common question we receive from clients is, “What do other firms do?”
About the Common Practices of GIPS-Compliant Firms Report
As a result of being asked this question many times, we gathered information about the firms we work with to provide answers to commonly asked questions that are based on real data versus anecdotal information. Our report was presented originally in August 2016 and subsequently in a September 2018 white paper. We work with a large client base who have adopted the 2020 GIPS standards, providing us the opportunity to update the information to provide data on a very broad client base. In 2020, the SEC released new guidance on how firms are able to present performance in an advertisement. This will have an impact on how a firm addresses certain questions in the future.
We gathered information from over 800 firms across 24 different countries that have had at least one verification completed by ACA as of August 1, 2021. These firms manage diverse assets ranging from less than $1 billion to over $1 trillion, and include investment strategies from traditional equity and fixed income to alternative assets.
Our report address questions such as:
- What internal business unit is responsible for GIPS compliance?
- What methodology is used to calculate net composite returns?
- Which accounting method is used for dividends?
- How often do firms update GIPS Reports?
- Which GIPS report is being provided to a limited distribution pool fund prospect?
Below is a sample of our findings.
Listen to our Recorded Webcast Discussion
ACA’s Joel Bernardin and Andrew Ball recently sat down to discuss the common practices of GIPS-Compliant-firms. Click here to listen to their discussion and get their insights on our research.