The performance measurement professionals of the securities industry are striving make the Global Investment Performance Standards (GIPS) of the CFA Institute much more relevant and easier to apply to their day-to-day lives.
In fact, several aspects of the GIPS guides need clarification, and Michael Beck, CIPM, CFP, vice president at the Glenmede Trust Company, N.A (Glenmede), and other industry experts took part in the FTF panel “An Update of the GIPS 20/20 Effort,” which covered the GIPS 20/20 project, an effort to solicit feedback on where GIPS standards are heading and their impacts upon investors. The goal of the ambitious 20/20 effort was to advance and streamline the GIPS standards.
Beck, who participated in the FTF’s PMA 2018 conference in New York City in early March, says that one of the major areas that needs GIPS guidance for implementation stems from the complexities “regarding marketable assets versus nonmarketable assets and how they’re set up.”
“On the marketable side, all those assets have to be time-waited returns where assets that are private equity and real estate have to use an IOR [internal rate of return] or rate of return,” Beck says. “If you have a portfolio that has both marketable and nonmarketable assets, we need to have a single standard and not a combination of the two because of the complexities around them.”
Beck explores several other relevant GIPS-related issues in this FTF News video chat.
FTF’s Performance Measurement Europe 2018 (PME) conference has been slated for on Thursday, September 27, 2018 in London.
Video Production: Janene Knox and William J. Poznanski, Jr.
Interview conducted by: Eugene Grygo, chief content officer, FTF News
Co-Producers: Sarah Hathaway, vice president, Financial Technologies Forum (FTF) and Eugene Grygo