Key Takeaway

• Boutique managers and alternatives managers typically fall under Firms when marketing performance.
• Wealth models require extra care: don’t blur discretionary and advisory performance presentations.
• Pensions/insurers usually align to Asset Owners for oversight reporting—unless they compete for mandates.
• Group structures demand a defensible entity boundary aligned to how you’re held out publicly.
• New firms should avoid rushing claims; build from the earliest period you can support with consistent data and policies.

This is where chapter selection stops being theoretical.

Because in the field, no one asks you, “Are you a firm or an asset owner?”

They ask you something like:

• “Can you send your GIPS report?”
• “Is this track record compliant, or just internally calculated?”
• “Are those returns a composite, a fund, or the total portfolio?”
• “Who exactly is included in the ‘firm’?”
• “Are you verified?”

So let’s walk through common scenarios and map them to the right chapter approach—using the decision tests you’ve already seen: role of performance presentation and whether you’re making a compliance claim / distributing reports.

(Note: in each scenario, if you are actively competing for business with performance, that pushes you toward the Firms framework even if you also qualify as an asset owner in an economic sense.)

Scenario 1: Boutique Discretionary Manager

Profile: A specialist manager running discretionary mandates (e.g., balanced portfolios, fixed income, equity strategies), pitching consultants and institutional allocators, with periodic factsheets and track record decks.

Correct chapter selection

• Chapter A (Firms) is your core standard set.
• You will also be anchored to Chapter D (GIPS Reports) because you will be providing GIPS reports to prospective clients/investors.

Why

This is the “classic” GIPS use case: performance is presented to win/retain assets under management, and the framework expects consistent composite construction and report distribution practices.

Practical notes

• Start with the firm definition and composite structure early.
• Build your report distribution process now—because the Firms standards contain specific expectations for providing and updating composite reports for prospects.

Scenario 2: Wealth Manager with Discretionary + Advisory Accounts

Profile: A wealth platform that has both:

• discretionary portfolio management (DPM), and
• advisory accounts where the client makes final decisions (often model-based).

This is a common chapter-selection trap because teams try to “treat everything like a composite” even when the mandate types are fundamentally different.

Correct chapter selection

• Chapter A (Firms) is still the governing framework if you are marketing performance.
• But internally, you need to be crisp about what is actually discretionary and eligible for composites under your defined criteria.

Why

The GIPS Firm framework is built for presenting performance as an investment manager. The moment you are competing for mandates, you should be thinking in Firms terms.

Practical notes (where wealth managers get exposed)

• Document your discretionary definition and apply it consistently.
• If you present performance for advisory programs, be extremely careful with how you label and support it—because “GIPS compliance” is not something you can apply to one slice of the business while ignoring the rest of the firm’s marketed performance narrative.
• Be deliberate about whether model-based performance is actual, hypothetical, or representative, and ensure your disclosures are consistent with the standards and applicable guidance.

Scenario 3: Private Markets / Alternatives Manager

Profile: Private equity, private credit, real estate, infrastructure—often with:

• closed-end structures,
• capital calls/distributions, and
• IRR, multiples, and since-inception reporting.

Correct chapter selection

• Chapter A (Firms) remains the core if you are raising capital or marketing performance.
• Chapter D (GIPS Reports) remains central because prospective investors will request compliant reporting.
• You may also need to consider how the standards treat pooled funds and related report obligations where relevant.

Why

Even though private markets reporting differs from traditional composites, the underlying principle is the same: presenting performance to win capital is a Firm use-case.

Practical notes

• Ensure your valuation policies, cash flow timing, and performance methodology are documented and consistently applied.
• For private markets, verification readiness is especially valuable because data lineage and valuation evidence often come under heavier scrutiny.

Scenario 4: Pension Fund / Insurer / Institutional Asset Owner

Profile: An asset owner with governance responsibility, reporting to a board/investment committee, and managing assets internally and via external managers.

Correct chapter selection (typical)

• Chapter B (Asset Owners) is the governing framework if the performance presentation is primarily for oversight body reporting and you are not marketing management services.

Why

The Asset Owner standards are designed for this environment: reporting centered on the total fund and oversight accountability.

The critical exception (the one most teams miss)

If the asset owner competes for business—for example, it markets internal management capabilities externally, seeks to manage third-party funds, or otherwise uses performance to win mandates—then for that competing activity it must comply with the GIPS Standards for Firms.

Practical notes

• Start by defining the asset owner boundary and total fund structure.
• Clarify governance deliverables: what exactly is provided to the oversight body, how often, and how delivery is evidenced.

Scenario 5: Holding Company / Group with Multiple Entities

Profile: A group structure with:

• an asset manager subsidiary,
• possibly a pension/insurance entity,
• possibly advisory/wealth entities,
• shared branding, and sometimes shared investment teams.

This is where “firm definition” becomes a strategic decision, not a technical one.

Correct chapter selection

It depends on how the group is held out to the public and how performance is presented:

• If a particular regulated entity markets investment management services, that entity typically follows Firms.
• If a group-level entity is an asset owner reporting total fund performance to an oversight body, that activity aligns with Asset Owners.

Why

The GIPS framework pushes you to define the complying entity in a way that is meaningful and not misleading. And compliance claims are entity-wide; you can’t imply compliance for a brand while limiting the scope to a convenient subset.

Practical notes

• Decide whether compliance will be claimed at the subsidiary level or for a broader entity definition.
• Ensure public messaging doesn’t create a scope mismatch (e.g., website implies the whole group is compliant when only one subsidiary is).

Scenario 6: New Firm with Partial Historical Data

Profile: A new manager with limited track record, incomplete history, or inherited performance from predecessor teams.

Correct chapter selection

• If you are competing for business using performance, you’re still in Firms.
• The question becomes less “which chapter?” and more “what can we present, and how do we support it?”

Why

New firms are tempted to “rush the claim” to look credible. But GIPS compliance is not a marketing slogan; it depends on having the policies, procedures, and data evidence to support the claim.

Practical notes (the safer path)

• Build policies and procedures first, then define composites and report templates.
• Be conservative and precise about the periods you can support with complete data.
• If you’re not ready for a full compliance claim, do not imply compliance in your materials. Build toward it.

The pattern across all scenarios

If you read the six scenarios and still feel unsure, here is the pattern that solves it:

• If performance is used to win business or capital → the safest default is Firms + GIPS Reports.
• If performance is used for governance oversight (and you do not compete for business) → the safest default is Asset Owners + Asset Owner Reports.
• If you’re designing for credibility → think through verification early, because verifier expectations expose scope confusion later.

Next, we’ll address the traps that cause smart teams to choose the wrong chapter even after reading the standards—because the mistakes are rarely about ignorance; they’re about organizational blind spots.

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