As investment managers face mounting regulatory scrutiny and increasingly sophisticated client expectations, compliance with the Global Investment Performance Standards (GIPS) continues to play a central role in how firms present performance data.
According to ACA Group, in 2025, the pressure is no longer just about meeting minimum requirements, but about demonstrating consistency, transparency and operational maturity. New research from ACA, based on data from 785 verified firms, offers a detailed snapshot of how the industry is evolving its approach to GIPS compliance.
One of the most notable shifts highlighted in the data is the growing use of model fees rather than actual fees when calculating net composite returns. The SEC’s marketing rule has acted as a catalyst for this change, particularly among larger firms. In 2025, 60% of large firms are now using model fees, compared with 44% in 2021. While this approach simplifies performance calculations and supports consistency across marketing materials, it also places greater emphasis on clear and accurate disclosures to ensure prospective clients are not misled.
The research also shows a changing attitude towards composite minimums. Just over half of firms, around 51%, continue to apply minimum asset thresholds for inclusion in composites. However, larger investment managers are increasingly moving away from this practice. For firms managing sizeable portfolios, smaller accounts tend to have a negligible impact on overall performance, reducing the perceived benefit of maintaining composite minimums while still adding operational complexity.
Operational burden is also influencing decisions around significant cash flow policies. Only 30% of firms now apply these policies, reflecting the challenges of implementing them consistently across portfolios. While such policies can improve the accuracy of performance reporting, they require robust systems and controls, which some firms may struggle to maintain at scale.
Technology is playing a growing role in another key trend: daily portfolio valuation. Around 60% of firms now revalue portfolios on a daily basis, underlining the industry’s push towards more precise and timely performance reporting. Advances in portfolio management systems and data infrastructure have made daily valuation more achievable, while regulators and clients alike are demanding higher levels of accuracy.
The impact of the SEC’s updated marketing rule runs through many of these developments. One of its most significant requirements is that gross-of-fee returns must be accompanied by net-of-fee returns, even in one-to-one presentations. This has prompted firms to reassess their composites, fee methodologies and disclosure practices, with many turning to model fees as a practical solution.
Ultimately, the findings underline why benchmarking matters. By comparing internal practices against industry norms, investment managers can reduce compliance risk, streamline operations and improve transparency with both clients and regulators. As regulatory expectations continue to evolve, firms that treat GIPS compliance as a strategic priority rather than a box-ticking exercise are likely to be better positioned for long-term success.
Copyright © 2026 RegTech Analyst
Copyright © 2018 RegTech Analyst
