GIPS^® Standards for Asset Owners

Why Should Asset Owners Comply?

Historically, the GIPS standards were silent on asset owners, and the guidance wasn’t a great fit.  CFA Institute, with input from the industry, issued guidance specifically for asset owners.  This guidance included considerations to make the GIPS standards a better fit for asset owners, such as the acknowledgment that many asset owners do not have prospective clients because they do not compete for business.  And, hopefully, guidance that would make it easier for asset owners to comply, such as the one-year minimum compliance requirement, rather than the five years required of asset managers.

Now that there is a chapter specific for asset owners, there are several reasons why asset owners should comply with the GIPS standards.

• The GIPS standards are a set of ethical principles that have been widely accepted by asset managers across the globe.
• Compliance with the GIPS standards demonstrates that the organization is committed to an external set of global industry standards and best practices.
• Provides stakeholders with greater confidence in what is being reported.
• Establishes robust policies and procedures within the organization.
• Ensures the use of consistent, transparent, and comparable methods for calculating and presenting performance.
• Demonstrates that the asset owner is willing to follow the same standards used by, and typically required of, external asset managers.