Benefits of Verification to Your Firm

The GIPS® are voluntary ethical standards for the presentation of a firm's historical performance results to prospective clients.  The GIPS® Vision Statement reads:

"A global investment performance standard leads to readily accepted presentations of investment performance that (1) present performance results that are readily comparable among investment management firms without regard to geographical location and (2) facilitate a dialogue between investment managers and their prospective clients about the critical issues of how the investment management firm achieved performance results and determines future investment strategies."

As such, a GIPS® Claim of Compliance and the subsequent Verification of that Claim of Compliance by an independent third party is a benefit to the investment management firm's marketing effort.  Consultants, databases, and knowledgeable institutional plan sponsors understand what GIPS® entails and are increasingly requiring GIPS® Compliance and Verification for inclusion in their RFP process.  In today's business environment, one does not want to be excluded from a prospect's consideration for lack of a voluntary ethical item.

Although the primary benefit of GIPS® Verification currently seems to be in aiding marketing to institutional relationships and through investment consultants, it appears that the High Net Worth marketplace is beginning to value this achievement as well.