As investment managers navigate evolving regulatory requirements and client expectations, maintaining compliance with the Global Investment Performance Standards (GIPS®) remains critical. ACA’s latest research, based on data from 785 verified firms, reveals how leading organizations are adapting their policies and practices in 2025.
Key Trends Shaping GIPS Compliance
1. Model vs. Actual Fees
The SEC’s marketing rule has accelerated the shift toward model fees. Today, 60% of large firms use model fees to calculate net composite returns, up from 44% in 2021. This approach simplifies calculations but requires careful disclosure to avoid misleading prospects.
2. Composite Minimums
While 51% of firms set composite minimums, larger firms are moving away from this practice. Why? Their portfolios are typically large enough that smaller accounts have minimal impact on composite performance.
3. Significant Cash Flow Policies
Only 30% of firms still apply significant cash flow policies, reflecting the operational complexity of implementing these rules consistently.
4. Daily Valuation
Accuracy matters. Approximately 60% of firms now revalue portfolios daily, a trend driven by technology and the need for precise performance reporting.
Impact of the SEC’s Marketing Rule
The SEC’s updated marketing rule has reshaped performance presentation standards. Firms must now ensure that gross-of-fee returns are accompanied by net-of-fee returns, even in one-on-one presentations. This change has prompted many firms to review composites and adopt model fees for consistency.
Why This Matters
Benchmarking your firm’s practices against industry norms can help you:
- Reduce compliance risk
- Improve operational efficiency
- Enhance transparency with clients and regulators
Download ACA’s full analysis for detailed benchmarks, best practices, and actionable insights.