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Embracing Transparen cy and Accountability: A Guide to GIPS Standards for Asset Owners

The world of investment management is a complex one and that’s why transparency and consistency is key. For asset owners, you need to keep entities such as pension funds and endowments safe and secure. Not only is this vital for long term success, but also for maintaining trust and keeping your business going. One of the most important ways to do this is with GIPS standards. These are global frameworks which enable you to meet these needs and ensure fair representation and full disclosure when it comes to investment performance. In this article we take a look into what GIPS standards are and just why they’re so important. 

Photo by Pixabay from Pexels: https://www.pexels.com/photo/numbers-on-monitor-534216/ 

What are GIPS standards?

As mentioned above, GIPS standards are an agreed set of principles and guidelines set by the CFA institute. They were originally designed for investment managers, but now this has been expanded to include asset owners. The world of finance can be complex and messy, but these aim to standardize the industry and make sure everyone adheres to the same guidelines. 

Why do GIPS standards matter for asset owners?

Some of the main things that GIPS standards do for asset owners includes: 

They ensure there’s transparency and trust

When it comes to assets and finances, transparency is key to building trust. You want people to know that you can be trusted and what you say is correct. By adhering to GIPS Standards, you can provide clear performance data that can easily be read, compared and analysed. This helps to build trust with stakeholders such as regulators and the general public and can help you to really reach the next level of business going forward. 

They make sure reporting is consistent

Consistency is vital when it comes to data and GIPS standards makes sure that this can happen. By following the standards, this consistent methodology helps to calculate and measure performance in an easy to follow way which means results can easily be compared and decisions can be made based on the data.

They boost your reputation

As for any business or asset owner, reputation is what will keep you going. By adhering to the GIPS standards, asset owners will be aligned with globally recognized best practices. This means you will look credible and trustworthy and be a serious contender within the investment community. This is vital for helping you to grow your portfolio and ensuring you last in the cut-throat world of financial assets. 

These are just a few things to keep in mind as to why GIPS standards are so important. No matter how long you’ve had your asset management business for, you should adopt these principles to help yourself thrive and flourish. You want to be seen as a trusted entity and someone with a solid reputation. These will help you to do just that. What are some top pieces of advice you have for asset owners when it comes to boosting credibility? Let us know your thoughts and feelings in the comments below, we’d love to hear from you. 

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