GIPS Conference 2021: Key takeaways

Sean P. Gilligan
Author
November 17, 2021
15 min
GIPS Conference 2021: Key takeaways

CFA Institute hosted the 25th annual GIPS Conference October 26th - 27th 2021. Like last year’s conference, viewers tuned in virtually to hear from industry experts on a range of subjects relating to GIPS compliance and investment performance.

The hottest topics of this year’s conference were the newest developments regarding compliance with the 2020 GIPS Standards, the SEC Marketing Rule, ESG reporting, and manager selection and oversight. Below are some key takeaways from this two-day event.

Updated Resources for the 2020 GIPS Standards

The 2020 edition of the GIPS standards was issued June 2019, and compliant firms are required to make any necessary updates before presenting performance for periods including 31 December 2020 in their GIPS Reports.

This year’s conference reminded firms of these updates and discussed implementation challenges. We have shared similar information in previous articles that may help your firm implement the 2020 GIPS standards if not yet fully adopted. For more information check out our previous articles on How to Comply with the 2020 GIPS Standards, How to Update your GIPS Policies & Procedures for GIPS 2020, and How to Update your GIPS Reports for the 2020 GIPS Standards.

CFA Institute has been hard at work updating the resources on their website so that the most relevant guidance is easy to find. This has involved updating or archiving outdated and repetitive documents, with some of this content being incorporated into new Guidance Statements.

Guidance Statements are authoritative guidance on a broad topic. The Guidance Statements on Supplemental Information, Risk, and Overlay were out for comment prior to issuance of the 2020 standards. Concepts from these Guidance Statements were included in the provisions and the Handbook, covering Supplemental Information and Risk sufficiently enough for those Guidance Statements not to be issued. The Guidance Statement on Overlay Strategies is currently being finalized.

Guidance Statements updated or new in 2021 include the updated Benchmark Guidance Statement (effective 1 April 2021) and new Wrap Fee Guidance Statement (Effective 1 October 2021).

Q&As are also authoritative guidance, but on a narrower topic compared to Guidance Statements. There was a lot of re-organization done to the Q&As, with 265 Q&As being archived and 39 updated by CFA Institute. Content from many of the archived Q&As is now incorporated within the Handbook, while other Q&As are no longer applicable under the 2020 Standards.

There were several new Q&As issued addressing 2020 standards topics.

FINRA Regulatory Notice 20-21

This year’s conference also addressed FINRA Regulatory Notice 20-21, guidance from which indicates that firms presenting IRRs in private placements must calculate and present performance in accordance with the methodology outlined in the GIPS standards.

Details on the calculation and presentation requirements for IRRs, as well as additional information on this regulatory notice was outlined in a previous blog released on this topic.

The GIPS standards generally prohibit firms from making statements about calculating returns in compliance with the GIPS standards, as compliance with the GIPS standards is “all or nothing” and firms cannot partially claim compliance.

With that being said, an exemption has been made to allow firms and their agents to make a specific statement regarding the GIPS Standards only in retail communications concerning private placement offerings that are prepared in accordance with FINRA Regulatory Notice 20-21. The following statements can now be used:

For firms that do NOT claim compliance with the GIPS standards:

[Insert firm name] has calculated the since-inception internal rate of return (SI-IRR) and fund metrics using a methodology that is consistent with the calculation requirements of the Global Investment Performance Standards (GIPS®). [Insert firm name] does not claim compliance with the GIPS standards. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote [insert firm name], nor does it warrant the accuracy or quality of the content contained herein.

For firms that claim compliance with the GIPS standards:

[Insert firm name] has calculated the since-inception internal rate of return (SI-IRR) and fund metrics using a methodology that is consistent with the calculation requirements of the Global Investment Performance Standards (GIPS®). [Insert firm name] claims compliance with the GIPS standards. GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote [insert firm name], nor does it warrant the accuracy or quality of the content contained herein.

Databases & the GIPS Standards

Investment manager databases are a powerful tool for the collection of standardized data from investment managers, including quantitative and qualitative data on firms and their strategies.

For managers who populate databases, the importance of providing all available information and keeping the monthly and quarterly performance data up-to-date was emphasized, as not doing so increases the likelihood of being filtered out of investors’ searches.

When narrowing down managers/products, some of the main criteria investors and consultants screen by include:

  • Risk/return metrics
  • Assets under management
  • Product-level details such as benchmarks and holdings
  • ESG and Diversity & Inclusion information

Longs Peak helps many clients calculate firm and product statistics and updates them in these databases each month. Getting support in this process is a great way to keep these items updated and help your firm avoid being filtered out for dated information.

The conference speakers also emphasized that when populating databases, GIPS compliant firms should treat these communications the same as any other qualified prospective client. Firms complying with the GIPS standards are required to make their best effort to distribute a GIPS Report to all prospective clients. Firms uploading performance to databases need to think of a database as a prospective client and include their GIPS Report.

A firm’s “best effort” in providing a GIPS Report to a database should involve uploading the GIPS Report directly to the database if that option is available. Otherwise, reaching out to your firm’s database contact and providing the GIPS Report via email also checks the box for this requirement.

The 2020 GIPS standards require firms to demonstrate that they’ve met the distribution requirement, thus it’s important to save any relevant emails and document this effort in a distribution log, similar to how it is done for other prospective clients.

ESG Disclosures

Environmental, social, and governance (ESG) refers to the evaluation of a firm’s sustainability and ethical impact of an investment in a business or company. Investors are increasingly using ESG criteria to screen investment products.

Research has shown that ESG considerations can have an impact on risk and return, so paying attention to these structural, long-term trends has become a focus for many firms as well as investors. Investors want transparency around how products are put together, what they do, and how they do it.

Asset management practices vary by firm, so there tends to be an expectation gap about what ESG means to different firms and what their products do. Disclosures around ESG products have tended to be on the lighter side, focusing on ESG as a process and how these considerations are integrated into the investment process and portfolio construction rather than the outcomes of the products and how those are measured.

Managers have opted to keep these disclosures light as to give themselves the opportunity to adjust their products as the market develops. With so many different questions being asked by investors, a need has arisen for standardizing the disclosure requirements for ESG products.

The CFA Institute Global ESG Disclosure Standards for Investment Products was issued 1 November 2021. This is the first global voluntary standard for disclosing how an investment product reflects ESG matters in its objectives, investment strategy, and stewardship activities.

The Handbook, which includes an explanation of the provisions and interpretive guidance, is set to be issued on or before 1 May 2022. Assurance procedures that will enable independent assessment of ESG disclosure statements is also set to be issued by the same date.

SEC Marketing Rule

The SEC Marketing Rule went into effect 4 May 2021, and firms registered with the U.S. Securities and Exchange Commission (SEC) have until 4 November 2022 to comply. As was the case for the 2020 GIPS standards, early adopters must meet all requirements of the new rule and cannot do a partial adoption.

Under the SEC Marketing Rule, GIPS Reports are considered an advertisement rather than a one-on-one presentation because GIPS Reports typically use the same performance table for all recipients and are a standardized marketing document.

Unfortunately, requirements of the SEC Marketing Rule are not all consistent with those of the GIPS Standards. Since SEC registered firms must ensure they are meeting all regulatory requirements that go beyond what GIPS requires, there are some changes firms may need to make once the SEC Marketing Rule is adopted. For example:

Return Stream – Firms must show net-of-fee returns. Net-of-fee returns must be net of advisory fees and custody fees if the adviser is paid for the custodial services (rather than a third-party custodian).

Track Record – Firms must present the 1-, 5-, and 10-year annualized returns in advertisements. If the track record does not go back this long, the annualized since inception return must be shown, in addition to the applicable time periods listed.

  1. If GIPS Reports are used as a standalone document, these statistics must be added to the GIPS Reports.
  2. If the GIPS Reports are included in a pitchbook or incorporated into other marketing materials, these statistics can be shown outside of the GIPS Report.
  3. Firms whose track records go back farther than the periods for which they claim compliance with the GIPS Standards must show these additional periods. For example, if the firm claims compliance with GIPS for the most recent 5 years, but the firm and strategy have existed for 10 years, the 10-year annualized performance must be shown. Since the GIPS standards do not allow firms to link compliant and non-compliant performance periods, if this is presented on the GIPS Report to satisfy this SEC requirement, a disclosure of this conflict must be included. The following is an example of how this disclosure could be written:
    • The inception of the firm’s GIPS compliance is 1/1/2016. Performance is presented with an inception date of 1/1/2011. Although the GIPS standards prohibit linking compliant and non-compliant performance periods, the 10-year annualized return is presented to meet local regulatory requirements set forth by the SEC Marketing Rule.”

Hypothetical Performance – Firms must make a clear differentiation (and have documented Policies & Procedures) on who may receive hypothetical performance in marketing. To receive this type of information, the recipient must be a sophisticated investor, as defined by the firm in their policies and procedures. The presented hypothetical performance must also be deemed relevant to the given recipient’s financial situation. If using hypothetical performance, firms are required to maintain a record of who it was shared with and how they met the qualifications to receive such performance.

Carve-Outs – What the GIPS standards refers to as a “carve-out,” the SEC Marketing Rule refers to as “extracted performance.” The SEC Marketing Rule also considers a composite of extracted performance to be hypothetical. Therefore, the recipients of carve-out composite performance, such as in a carve-out composite’s GIPS Report, must be qualified to receive hypothetical performance as described in the Hypothetical Performance section above.

Non-Fee-Paying Accounts – Firms must apply a model fee to any non-fee-paying accounts within composites if net-of-fee returns are presented using actual fees. Firms that apply model fees (instead of actual) to determine composite-level net-of-fee returns will not need to make any changes. The fee applied to the non-fee-paying accounts should be the highest fee that was charged historically or the highest possible fee the advisor would charge today.

Frequency/Timeliness of Updates – Marketing must be updated as of the latest calendar year-end at a minimum. However, more recent periods (such as YTD) may be required if, for example, a material shift in the performance occurred since the latest calendar year-end. It is generally expected that most firms should be able to update performance through the end of the calendar year within one month after the year ends.

  • Not showing more recent, YTD performance could be considered misleading if more timely quarter-end performance is available and/or events have occurred that would have a significant negative effect on the advisor’s performance (think of updating performance to show 1Q20 to show the impact of COVID). It is important to keep in mind that the general focus of the SEC Marketing Rule is to ensure the presentation is “fair and balanced.” Part of ensuring the presentation is fair and balanced would be showing the most recent performance available regardless of whether it is favorable or unfavorable for your firm.
  • Future guidance is expected to be issued, as firms have expressed concerns around the difficulty of implementing this.

Portability – Requirements for presenting portable track records are materially the same between the SEC Marketing Rule and the GIPS Standards. However, the Marketing Rule indicates that if the main individual or team responsible for managing the strategy at the prior firm leaves the current firm, then the portable period can no longer be shown.

  • During the conference, there was discussion around possibly being able to continue presenting the portable track record of terminated decision-makers if knowledge of implementing the strategy has been sufficiently transferred to an individual or team at the current firm. A reasonable time-period for this transfer of knowledge could not be specified, as it would depend on the complexity of the strategy. For example, a quantitative strategy primarily managed with an algorithm would likely require less time than a more qualitative investment strategy.
  • The key point highlighted was that if firms are electing to present portable track records after key individual(s) are no longer with the current firm, it is important to clearly document this knowledge transfer in case presenting the portable track record is questioned by a regulator.

Conclusion

This year’s speakers did a great job of hitting on the most relevant industry topics and providing resources to add clarification regarding the 2020 GIPS standards.

While the past two virtual conferences have each been a success, we are excited about the possibility of the next conference being in person.

If you have any questions about the 2021 GIPS Virtual Conference topics or GIPS and performance in general, please contact us.

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Key Takeaways from the 2025 PMAR Conference
This year’s PMAR Conference delivered timely and thought-provoking content for performance professionals across the industry. In this post, we’ve highlighted our top takeaways from the event—including a recap of the WiPM gathering.
May 29, 2025
15 min

The Performance Measurement, Attribution & Risk (PMAR) Conference is always a highlight for investment performance professionals—and this year’s event did not disappoint. With a packed agenda spanning everything from economic uncertainty and automation to evolving training needs and private market complexities, PMAR 2025 gave attendees plenty to think about.

Here are some of our key takeaways from this year’s event:

Women in Performance Measurement (WiPM)

Although not officially a part of PMAR, WiPM often schedules its annual in-person gathering during the same week to take advantage of the broader industry presence at the event. This year’s in-person gathering, united female professionals from across the country for a full day of connection, learning, and mentorship. The agenda struck a thoughtful balance between professional development and personal connection, with standout sessions on AI and machine learning, resume building, and insights from the WiPM mentoring program. A consistent favorite among attendees is the interactive format—discussions are engaging, and the support among members is truly energizing. The day concluded with a cocktail reception and dinner, reinforcing the group’s strong sense of community and its ongoing commitment to advancing women in the performance measurement profession.

If you’re not yet a member and are interested in joining the community, find WiPM here on LinkedIn.

Uncertainty, Not Risk, is Driving Market Volatility

John Longo, Ph.D., Rutgers Business School kicked off the conference with a deep dive into the global economy, and his message was clear: today’s markets are more uncertain than risky. Tariffs, political volatility, and unconventional strategies—like the idea of purchasing Greenland—are reshaping global trade and investment decisions. His suggestion? Investors may want to look beyond U.S. borders and consider assets like gold or emerging markets as a hedge.

Longo also highlighted the looming national debt problem and inflationary effects of protectionist policies. For performance professionals, the implication is clear: macro-level policy choices are creating noise that can obscure traditional risk metrics. Understanding the difference between risk and uncertainty is more important than ever.

The Future of Training: Customized, Continuous, and Collaborative

In the “Developing Staff for Success” session, Frances Barney, CFA (former head of investment performance and risk analysis for BNY Mellon) and our very own Jocelyn Gilligan, CFA, CIPM explored the evolving nature of training in our field. The key message: cookie-cutter training doesn't cut it anymore. With increasing regulatory complexity and rapidly advancing technology, firms must invest in flexible, personalized learning programs.

Whether it's improving communication skills, building tech proficiency, or embedding a culture of curiosity, the session emphasized that training must be more than a check-the-box activity. Ongoing mentorship, cross-training, and embracing neurodiversity in learning styles are all part of building high-performing, engaged teams.

AI is Here—But It Needs a Human Co-Pilot

Several sessions explored the growing role of AI and automation in performance and reporting. The consensus? AI holds immense promise, but without strong data governance and human oversight, it’s not a silver bullet. From hallucinations in generative models to the ethical challenges of data usage, AI introduces new risks even as it streamlines workflows.

Use cases presented ranged from anomaly detection and report generation to client communication enhancements and predictive exception handling. But again and again, speakers emphasized: AI should augment, not replace, human expertise.

Private Markets Require Purpose-Built Tools

Private equity, private credit, real estate, and hedge funds remain among the trickiest asset classes to measure. Whether debating IRR vs. TWR, handling data lags, or selecting appropriate benchmarks, this year's sessions highlighted just how much nuance is involved in getting private market reporting right.

One particularly compelling idea: using replicating portfolios of public assets to assess the risk and performance of illiquid investments. This approach offers more transparency and a better sense of underlying exposures, especially in the absence of timely valuations.

Shorting and Leverage Complicate Performance Attribution

Calculating performance in long/short portfolios isn’t straightforward—and using absolute values can create misleading results. A session on this topic broke down the mechanics of short selling and explained why contribution-based return attribution is essential for accurate reporting.

The key insight: portfolio-level returns can fall outside the range of individual asset returns, especially in leveraged portfolios. Understanding the directional nature of each position is crucial for both internal attribution and external communication.

The SEC is Watching—Are You Ready?

Compliance was another hot topic, especially in light of recent enforcement actions under the SEC Marketing Rule. From misuse of hypothetical performance to sloppy use of testimonials, the panelists shared hard-earned lessons and emphasized the importance of documentation. This panel was moderated by Longs Peak’s Matt Deatherage, CFA, CIPM and included Lance Dial, of K&L Gates along with Thayne Gould from Vigilant.

FAQs have helped clarify gray areas (especially around extracted performance and proximity of net vs. gross returns), but more guidance is expected—particularly on model fees and performance portability. If you're not already documenting every performance claim, now is the time to start.

“Phantom Alpha” Is Real—And Preventable

David Spaulding of TSG, closed the conference with a deep dive into benchmark construction and the potential for “phantom alpha.” Even small differences in rebalancing frequency between portfolios and their benchmarks can create misleading outperformance. His recommendation? Either sync your rebalancing schedules or clearly disclose the differences.

This session served as a great reminder that even small implementation details can significantly impact reported performance—and that transparency is essential to maintaining trust.

Final Thoughts

From automation to attribution, PMAR 2025 showcased the depth and complexity of our field. If there’s one overarching takeaway, it’s that while tools and techniques continue to evolve, the core principles—transparency, accuracy, and accountability—remain as important a sever.

Did you attend PMAR this year? We’d love to hear your biggest takeaways. Reach out to us at hello@longspeakadvisory.com or drop us a note on LinkedIn!

ColoradoBiz Names Longs Peak’s Jocelyn Gilligan, CFA, CIPM as a Gen XYZ Top Young Professional
Longs Peak is pleased to announce that Partner and Co-Founder, Jocelyn Gilligan has been named a GenXYZ Top Young Professional by ColoradoBiz Magazine. As ColoradoBiz states, “They’re uncommon achievers, whether as entrepreneurs, CEOs, nonprofit leaders, visionaries critical to their companies’ success or, in some cases, all of those roles. This year’s Top 25 Young Professionals figure to continue making a difference professionally and in their communities for years to come.”
March 14, 2023
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Longs Peak is pleased to announce that Partner and Co-Founder, Jocelyn Gilligan has been named a GenXYZ Top Young Professional by ColoradoBiz Magazine.

As ColoradoBiz states, “They’re uncommon achievers, whether as entrepreneurs, CEOs, nonprofit leaders, visionaries critical to their companies’ success or, in some cases, all of those roles. This year’s Top 25 Young Professionals figure to continue making a difference professionally and in their communities for years to come.”

Jocelyn grew up in Boulder, CO and graduated from the University of Colorado. She started her career at Ernst & Young in New York City where she worked on their Financial Services Transfer Pricing Team. She transferred with EY to their office in Shanghai and then eventually to Hong Kong. Jocelyn left EY as a Manager and relocated back to Colorado where she and her husband started a family. Soon thereafter, Jocelyn and Sean founded Longs Peak out of a small one-car garage in their home in Longmont, CO. Now running a thriving team of 14, Jocelyn has weathered the ups and downs of entrepreneurship. She credits a lot of their success to their amazing team and the community of entrepreneurs they live near and network with (Longs Peak is an active member of EO (Entrepreneurs Organization)).

Jocelyn is a voting member of the PTO at her children’s school and a member of Women in Investment Performance Measurement, a group recently founded to support women in the investment performance industry.

About ColoradoBiz’s Top 25 Young Professionals

The 13th annual Gen XYZ awards is open to those under 40 who live and work in Colorado — numbered in the hundreds, making for difficult decisions and conversations among judges, as always. Applications were judged by our editorial board based on career achievement, community engagement and their stories of how they got to where they are now.

About Longs Peak

Longs Peak is a purpose and values-driven company. It is our mission to make investment performance information more transparent and reliable—empowering investors to make better, more informed investment decisions.

At the onset, we were looking to help smaller investment managers by giving them access to professional performance experts and tools typically only available to very large firms. We know that our work enables emerging managers to compete with the big guys and helps facilitate their growth. We strive to be our clients’ most valued outsource partner and to be known for our exceptional client service. We know that providing exceptional client service means that we must first create a culture that lives by the ideals we are trying to create for our clients. A place where incredibly talented individuals are empowered to put their best work into the hands of clients that truly value what we do. As a firm, we recognize that our greatest asset is people – both those we work with and those we work for. We continue to evolve into something that represents the needs of both of these groups and hope someday a GIPS Report is provided to every prospective investor in the world.

SEC Clarifies Marketing Rule: Gross-of-Fee Returns Allowed Under Certain Conditions
The investment management industry has spent significant time grappling with the SEC’s Marketing Rule and the question of whether gross-of-fee returns can be presented without corresponding net-of-fee returns in certain cases. Many firms have invested resources in trying to allocate fees to individual securities and sectors in an effort to comply. However, the SEC has now issued two FAQs (March 19, 2025) that provide much appreciated clarity on extracted performance and portfolio characteristics. The key takeaway? It is possible to present gross-of-fee returns without net-of-fee returns—if certain conditions are met.
March 27, 2025
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The investment management industry has spent significant time grappling with the SEC’s Marketing Rule and the question of whether gross-of-fee returns can be presented without corresponding net-of-fee returns in certain cases. Many firms have invested resources in trying to allocate fees to individual securities and sectors in an effort to comply. However, the SEC has now issued two FAQs (March 19, 2025) that provide much appreciated clarity on extracted performance and portfolio characteristics. The key takeaway? It is possible to present gross-of-fee returns without net-of-fee returns—if certain conditions are met.

Extracted Performance: Gross Returns Can Stand Alone Under Specific Criteria

Investment advisers often present the performance of a single investment or a subset of a portfolio (“extracted performance”) in marketing materials. Historically, the SEC required both gross and net performance to be shown for such extracts. The new guidance provides a pathway for firms to display only gross-of-fee extracted performance, provided the following conditions are met:

  1. The extracted performance must be clearly identified as gross performance.
  2. The advertisement must also present the total portfolio’s gross and net performance in a manner consistent with SEC requirements.
  3. The total portfolio’s performance must be given at least equal prominence to, and facilitate comparison with, the extracted performance.
  4. The total portfolio’s performance must be calculated over a period that includes the entire period of the extracted performance.

If these conditions are satisfied, the SEC staff has indicated they will not recommend enforcement action, even if the extracted performance is presented without corresponding net returns. This is a notable shift, as it allows firms to avoid the complex and often impractical task of allocating fees at the investment or sector level.

Portfolio and Investment Characteristics: Net-of-Fee Not Always Required

Another common industry question has been whether certain portfolio or investment characteristics—such as yield, volatility, Sharpe ratio, sector returns, or attribution analysis—constitute “performance” under the marketing rule, and if so, whether they must be presented net of fees.

The SEC’s latest guidance acknowledges that calculating these characteristics net of fees can be difficult and, in some cases, may lead to misleading results. As a result, the staff has confirmed that firms may present gross characteristics alone, without net characteristics, if they meet the following criteria:

  1. The characteristic must be clearly identified as calculated without the deduction of fees and expenses.
  2. The advertisement must also present the total portfolio’s gross and net performance in a manner consistent with SEC requirements.
  3. The total portfolio’s performance must be given at least equal prominence to, and facilitate comparison with, the gross characteristic.
  4. The total portfolio’s performance must be calculated over a period that includes the entire period of the characteristic being presented.

As with extracted performance, these conditions help ensure that the presentation is not misleading, reducing the risk of enforcement action.

Bottom Line: A Practical Path Forward

This updated SEC guidance provides much-needed flexibility for investment managers, allowing for the presentation of gross-of-fee returns in a compliant manner. Firms that clearly disclose their approach and follow the specified conditions can reduce compliance burdens while still meeting investor protection standards. While this does not eliminate all complexities of the Marketing Rule, it does offer a practical solution that allows for more straightforward and meaningful performance reporting.

For firms navigating these changes, ensuring clear disclosures and maintaining compliance with the general prohibitions of the rule remains critical. Those who align their advertising materials with these guidelines can now confidently use gross-of-fee performance in a way that is both transparent and in compliance with regulatory requirements.

Questions?

If you have questions about calculating or presenting investment performance in a manner that complies with regulatory requirements or industry best practices, we would love to talk to you. Please feel free to email us at hello@longspeakadvisory.com.