Key Takeaway

• Test #1: Are you presenting performance as a manager competing for business (Firms) or as an asset owner reporting to an oversight body (Asset Owners)?
• Test #2: Are you making a GIPS compliance claim and distributing reports externally (or to the oversight body)?
• These two tests resolve most Firm vs Asset Owner confusion quickly.
• If your performance is used for mandate pursuit, you’re likely in Firms + GIPS Reports territory.
• Treat the decision like a verifier would: can you support the claim with policies and evidence?

If GIPS chapter selection feels like a maze, it’s usually because teams try to solve it with org charts.

GIPS 2020 doesn’t reward org charts. It rewards role clarity.

So instead of starting with “What are we called?” start with two tests that a verifier, consultant, or institutional allocator will instinctively apply the moment they see your materials:

1. What role are you playing when you present performance?
2. Are you actually making a GIPS compliance claim—and distributing GIPS Reports externally?

When you answer those two questions cleanly, the chapter choice becomes far less mysterious—and far more defensible.

Test #1: Are You Presenting Performance as a Manager or as an Asset Owner?

This is the test behind the most common confusion in the market: Firm vs Asset Owner.

The simplest way to think about it

• Manager lens (Firm): “Here is our investment strategy performance. Compare us to other managers. Allocate to us.”
• Owner lens (Asset Owner): “Here is how our total fund performed. Oversight, governance, and stewardship are the audience.”

GIPS 2020 formalizes this by separating the standards into tailored provisions for firms and asset owners. (GIPS)

What “Asset Owner” means in GIPS 2020 (the part people skip)

The GIPS Standards for Asset Owners are intended for asset owners that:

• do not compete for business, and
• report performance to an oversight body. (GIPS)

That “oversight body” framing is not decorative. It’s the signal for what the asset owner chapter is built to do: provide a credible, consistent way to report performance for governance accountability (not marketing).

The sentence that resolves 80% of chapter confusion

Here’s the line that forces clarity:

“Asset owners that compete for business must comply with the GIPS Standards for Firms.” (GIPS)

That’s the pivot. If your organization is seeking external mandates, marketing internal capabilities, or otherwise competing to manage assets beyond its own oversight reporting purpose, you are in Firms territory for that activity.

Practical indicators you’re presenting as a Firm (even if you’re “an asset owner” in real life)

You are almost certainly operating under the GIPS Standards for Firms if you do any of the following in relation to performance:

• Present returns to win third-party client assets
• Pitch an internal desk or subsidiary as an investment manager
• Produce strategy-level materials designed for prospective clients/investors
• Offer products or mandates where prospects compare you against peers
• Distribute materials like “strategy performance,” “track record,” “composite returns,” “product factsheets” with an allocation intent

This aligns with how the Firms standards are structured: firms must make every reasonable effort to provide the appropriate GIPS Report to required prospective recipients and must not “choose” who gets one. (GIPS)

Practical indicators you’re presenting as an Asset Owner

You are likely operating under the GIPS Standards for Asset Owners if performance is primarily being presented as:

• Total fund performance to a board/trustees/investment committee
• A stewardship report showing how assets under oversight were managed
• A governance-ready view that may include external managers but is reported as the owner’s total portfolio results
• Reporting designed to demonstrate accountability for assets under fiduciary oversight

This is consistent with the Asset Owner standards’ foundation: properly defining the asset owner and providing GIPS Asset Owner Reports to those with direct oversight responsibility. (GIPS)

The “dual reality” case: when one organization can legitimately touch both

Some organizations genuinely live in both worlds: they are asset owners, but they also market investment management services.

GIPS anticipates that complexity. The right move is not to “pick the easiest chapter.” The right move is to separate the performance presentation by role—so your compliance approach matches what the performance is being used to do. (GIPS)

Test #2: Are You Making a GIPS Compliance Claim and Distributing Reports Externally?

This test is where many well-meaning teams accidentally create risk.

Because there’s a difference between:

• using GIPS-like methods internally, and
• claiming compliance (and distributing materials that function like GIPS Reports).

What counts as a “GIPS compliance claim” in practice

A compliance claim is not just the phrase “we comply.”

It’s any public or external-facing statement that represents your organization as compliant with the GIPS standards—especially when paired with performance information that a prospect would reasonably treat as a compliant presentation.

GIPS guidance emphasizes that compliance is an all-in, organization-wide commitment, not a selective label for one product line. The Firms handbook is explicit: compliance cannot be met on a composite, pooled fund, or portfolio basis—only on a firm-wide basis. (GIPS)

That principle matters for chapter selection because it forces you to define the “entity” correctly before you label anything as compliant.

External distribution is the pressure point

Once you’re providing performance externally in a way that triggers the standards’ reporting and distribution expectations, you’re no longer in the “informal” zone.

For firms, the standards contain explicit requirements around providing GIPS composite reports (and pooled fund reports, where applicable) to prospective clients/investors, including timing and update expectations. (GIPS)

This is why Test #2 is a chapter-selection accelerator:

• If you are distributing performance externally to win business, you are almost certainly in Firms + GIPS Reports territory. (GIPS)
• If you are reporting to an oversight body and not competing for mandates, you are likely in Asset Owners + Asset Owner Reports territory. (GIPS)

Where “GIPS Reports” and “GIPS Asset Owner Reports” quietly do the sorting for you

A useful shortcut is to ask: What report does the standards framework expect us to be building?

• Firms build GIPS Reports designed for prospective clients/investors (e.g., composite or pooled fund reporting). (GIPS)
• Asset owners provide GIPS Asset Owner Reports to their oversight body. (GIPS)

If your current deliverable doesn’t fit either of those categories, that’s often a signal you’re mixing frameworks—or you haven’t defined your role tightly enough yet.

Where verifiers come into this test (and why you should care early)

Even if you’re not pursuing verification immediately, Test #2 should be answered as if you were—because verification readiness is basically “future credibility insurance.”

GIPS verification is designed to provide additional confidence in an organization’s claim of compliance, and it is conducted on a firm-wide or asset owner-wide basis by an independent verification firm using required procedures. (GIPS)

And independence isn’t casual—it’s a core expectation. The GIPS guidance on verifier independence underscores that independence is part of a verifier’s qualification requirements and that the firm has the responsibility for appointing a qualified verifier. (GIPS)

So when you ask, “Are we making a compliance claim and distributing externally?” you’re also asking:

• Are we prepared to support this claim with policies, procedures, and evidence?
• Are we prepared for an independent party to test the entity scope and reporting practices?

If the honest answer is “not yet,” that doesn’t mean you stop. It means you tighten scope, avoid premature compliance language, and build in the right order.

The punchline of the two tests

Test #1 tells you whether your performance story is being told as a manager or an owner.

Test #2 tells you whether you’re merely improving internal discipline—or stepping into the world of formal GIPS compliance claims and external reporting obligations.

Pass both tests clearly, and the chapter choice becomes straightforward.

Next up we’ll map that clarity to the structure of the standards themselves—so you can see exactly how Chapters A, B, C, and D interlock (and where verifiers sit in that map).

<<< Previous: Ep2

Next: Ep4 >>>