We believe strongly in demonstrating a commitment to open, honest, and ethical practices. This is why we voluntarily go beyond legal reporting requirements and claim compliance with the Global Investment Performance Standards (GIPS®). While we often highlight this claim of compliance, we don’t always explain what it means or why we are so proud that we can make this claim.

What are the GIPS standards? The Global Investment Performance Standards, or GIPS standards, are a rigorous set of investment performance measurement standards utilized worldwide and recognized for their credibility, integrity, scope, and uniformity. To claim compliance with the standards, an investment firm must demonstrate adherence to comprehensive and rigorous rules governing data input, calculation methodology, composite construction, disclosures, presentation, and reporting.

Why are the GIPS standards important to investors?  The thoroughness of the GIPS standards gives investors the transparency they need to compare and evaluate investment managers worldwide. The standards provide assurance that the historical performance reported by compliant firms is both complete and fairly presented because it eliminates survivorship biases, misrepresentations, and omissions of historical data. This gives investors a greater level of confidence in the integrity of performance presentations, as well as the general practices of GIPS-compliant firms.

What is GIPS Verification? Verification is a voluntary process that demonstrates commitment to the fundamental principles of full disclosure and fair representation of performance results.  During a verification, an independent third-party assesses whether a firm’s policies and procedures related to composite maintenance, as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm-wide basis.

LightPoint Portfolio Solutions™ first claimed compliance with the GIPS standards in 2018, and our performance has been independently verified going back to 2017. On a monthly basis, we internally review performance data for over 500 accounts, and each year, we hire an independent third-party to conduct a GIPS verification.  If this sounds like a significant time and resource commitment, it is.  We spend countless hours ensuring that we adhere to the standards because we want to show our clients and partners how committed we are to our fiduciary responsibilities.

For more information, please visit www.gipsstandards.org.

 

LightPoint Portfolio Solutions™ claims compliance with the Global Investment Performance Standards (GIPS®).  GIPS®is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein. To obtain GIPS-compliant performance information for LightPoint™ strategies, please contact Hillary Sunderland at hillary@beaconwealth.com.