Virtual GIPS seminar highlighted the benefits of GIPS Standards as ethical best practices

Clockwise from left Niina Arkko, Iain McAra, Tim Hemansson, Janne Aalto and Kristian Nihtilä.

CFA Society Finland was really pleased to offer members and stakeholders the chance to listen to a true expert in the field of GIPS standards. CFA Institute’s Iain McAra, Director, Global Industry Standards, EMEA region, acted as the keynote speaker in the seminar and presented on the theme “What to expect: 2020 GIPS® Standards. CFA Society Board Vice President Niina Arkko opened the event and warmly welcomed all the attendees to this late afternoon seminar.

THE GIPS STANDARDS

Iain McAra

The Global Investment Performance Standards (GIPS) are a set of standardized, industry-wide ethical principles that guide investment managers and asset owners on how to fairly calculate and present their investment results, with the goal of promoting performance transparency and comparability. The Standards make it possible for investors to compare the past performance of asset managers and, on the other hand, for asset owners to fully disclose and fairly present performance to oversight bodies and stakeholders. The GIPS Standards are developed by CFA Institute with the help of volunteers from the investment community and GIPS Sponsors that include 60+ not-for-profit organizations.

The previous GIPS Standards were published in 2010. The 2020 GIPS Standards represent an important milestone — in both the evolution of the Standards and ensuring their relevance for all asset classes and types of investment managers. The new Standards include different specific sets of guidelines for firms, asset owners and verifiers.

presentation and a panel discussion

Mr. McAra’s gave us a terrific presentation on the many aspects of GIPS Standards and how it has evolved in the past decades, focusing especially on the changes since the last GIPS Standards were issued. The Standards offers a great tool in setting global ethical best practices that are full, fair, consistent and comparable. By claiming compliance to these standards financial actors build trust in the industry and put the clients interest first, which are key components in making the whole investment industry function better.

The presentation was followed by a panel discussion by Finnish local professionals including Janne Aalto from EY, Tim Hermansson from Investment Research Finland and Kristian Nihtilä from Fin FSA. As a moderator we had the continued pleasure of listening to the expertise of Mr. McAra.

(Note: The panelists took part in the discussion as private persons, not necessarily stating the official opinion of their employers).

The discussion brought up interesting points concerning the situation in Finland, how the panelists see the role of GIPS Standards and the future in local and global markets. There are altogether nine organizations domiciled in Finland claiming compliance to GIPS reporting. Asset owners in Finland are yet to take on this reporting, albeit in practice they very often already follow the very same standards. As a general opinion the GIPS Standards are thought to be a very beneficial tool for companies to show transparency in their operations, showcase historical performance and risk profile as well as increase international competitiveness and growth towards bigger markets.

We are certain that our attendees got a lot more knowledge on GIPS Standards and their benefits in the finance reporting. This is also a great chance for us as CFA advocates to market the benefits of officially following the GIPS Standards to build stronger client relationships, increase trust in the finance industry and highlight the role of ethics in everyday work life.

Read more: CFA Institute