Q & A Database

The GIPS Standards Q&A database contains questions and answers (Q&As) on various searchable topics that provide additional interpretation on an issue. Q&As are considered to be authoritative guidance and must be followed in order to claim compliance with the GIPS standards.

Content from prior Q&As was included in the GIPS Standards Handbook as much as possible and many Q&As were archived. Change the Status drop-down filter to "Archived" to see the archived Q&As.

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Archived

Effective: 1 December, 2013 - 31 December, 2019

Categories: Sub-Advisors

Source: GIPS Executive Committee

A firm uses a sub-advisor to manage a portion of the assets for a strategy that it manages. Should the assets assigned to the sub-advisor be excluded from total firm assets? Should those assets be excluded from the firm’s composite performance?

If the firm has discretion over the selection of the sub-advisor, then the assets managed by the sub-advisor on behalf of the firm must be included in total firm assets. Once the assets are given to a sub-advisor to manage, the firm will not have control over exactly how those assets are invested by the sub-advisor. Nevertheless, the firm chose to invest the assets by placing them with a sub-advisor and has the discretion to hire or fire the sub-advisor.

The firm must treat the assets assigned to a sub-advisor as they would with other assets that are managed in-house and must include those assets in the firm’s total firm assets calculation, and assign those assets to the appropriate composites to be included in the firm’s composite performance calculation. The firm can only include the sub-advisor’s assets and performance record relevant to those assets assigned by the firm.

Please also see original Q&A