GIPS® Standards for OCIO/Consultants

Can OCIOs Be GIPS Compliant?

Yes! OCIOs can absolutely be GIPS compliant.  We have helped OCIOs achieve GIPS compliance, and conduct verification for a number of OCIOs.

While some believe OCIOs cannot claim compliance, this is not the case.

In fact, OCIOs can be thought of as just another segment of the investment marketplace, where the managers compete for business and will want to showcase their past performance.

When we think of the main challenges to achieving GIPS compliance for all firms, we think of these steps to compliance:

  • Defining the firm for GIPS compliance purposes
  • Creating a composite structure for the creation and maintenance of composites that are meaningful to the firm’s marketing efforts now and hopefully years from now
  • Defining discretion
  • Creating and documenting all the policies and procedures to become and maintain GIPS compliance
  • Creating the compliant presentations and list of composite descriptions
  • Possibly selecting a performance and composite system.

OCIOs have all these considerations, with some additional challenges that may appear unique but, in reality, are not. But this isn’t unique to OCIOs, as many traditional asset managers face the same issue, which is not insurmountable. From our experience, OCIOs have customized strategies for clients, so defining discretion and composite construction may be a little more challenging.

GIPS requires all actual, fee-paying, discretionary accounts to be in at least one composite. Since they customize strategies for each client, does this mean that each will get its own composite? For example, if you have 50 clients with customized strategies, does that mean you will have 50 composites?

    OCIOs have all these considerations, with some additional challenges that may appear unique but, in reality, are not. But this isn’t unique to OCIOs, as many traditional asset managers face the same issue, which is not insurmountable. From our experience, OCIOs have customized strategies for clients, so defining discretion and composite construction may be a little more challenging.

    GIPS requires all actual, fee-paying, discretionary accounts to be in at least one composite. Since they customize strategies for each client, does this mean that each will get its own composite? For example, if you have 50 clients with customized strategies, does that mean you will have 50 composites?

    No, because that wouldn’t be very meaningful for the firm.  By doing a thorough review of accounts and working through the firm’s marketing efforts and strategies, you will actually come up with a definitive view of strategies and end up with meaningful composites that include more than one account.

    This may mean a bit more dispersion, but that’s fine as long as the composites are representative of the firm’s products.

    And, there may be accounts that would be considered non-discretionary for an OCIO (e.g., the firm has to get written approval from the client before executing any trade, legacy assets are not allowed to be sold until directed or approved by the client, etc), just as with any other asset manager.

      Request a Proposal

      Get a Customized Proposal

       if you are thinking about compliance, then complete our very short GIPS Verification Questionnaire. 

      We will provide you with a detailed proposal as  well as a link to a special webinar we did with Strategic Investment Group on the topic of GIPS compliance for OCIOs.  Or, if you need immediate assistance, please call 732-873-5700.

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