The GIPS (Global Investment Performance Standards) verification process can place a significant operational burden on asset management firms, often requiring extensive manual effort to prepare, format, and deliver performance data, according to Damian Handzy, Managing Director at Confluence Analytics.
The GIPS are a set of voluntary ethical standards developed by the CFA Institute to ensure consistent and transparent reporting of investment performance.
GIPS provides a framework for how investment firms should calculate and present performance results, making it easier for investors to compare firms on a fair and equal basis. By adhering to GIPS, firms commit to full disclosure and standardized methods, helping prevent misleading practices like selective performance reporting.
Compiling historical performance data, formatting it to meet verifier-specific requirements, and managing rounds of follow-up requests often demands significant time from compliance and operations teams, Handzy said, adding that a recent update from Confluence Technologies aims to address that.
On September 17, the company released a new capability within its Revolution Composites platform: a standardized export designed specifically for The Spaulding Group (TSG), one of the industry’s GIPS verifiers.
The feature allows asset managers to generate GIPS data in exactly the format TSG requires, eliminating the need for manual formatting and reducing the back-and-forth traditionally involved in the verification process, Handzy explained.
“Increasing demand for automation and standardization are not just a trend in regulatory, performance or reporting – they are trends all over the financial services industry,” he told Traders Magazine.
“Both better automation and increased standardization mean that professionals can spend more time on value-add activities that investors really want,” he added.
The verification process, while critical for GIPS compliance, has historically involved a high degree of manual effort, Handzy said, adding that asset managers often need to respond to multiple data requests, reformat performance records, and reconcile inconsistencies before a verifier can complete its review.
With the new integration, clients using both Confluence’s GIPS Composites solution and TSG’s verification services can bypass many of those manual steps, he said.
“Clients using both our GIPS Composites solution and TSG’s verification process now have a much more efficient process,” Handzy explained. “They can identify and address any issues faster than before, which means they can get on with the business of managing investors’ or plan members’ assets.”
According to Confluence, the automation not only speeds up the verification process but also improves data accuracy and reduces operational risk.
Despite the efficiency gains, Handzy cautions against the assumption that automation reduces the need for human expertise.
“This enhancement is about making the process faster and more efficient by reducing repetitive manual processes,” he said. “But the industry needs more, not fewer, skilled GIPS resources.”
Instead of replacing compliance professionals, the technology is intended to support them—freeing up time previously spent on manual formatting so teams can focus on higher-value tasks, such as data review and risk monitoring, Handzy said.
“With the right technology tools, compliance teams can become proactive—identifying any outliers or suspicious data long before they become real problems,” Handzy noted.
The partnership between Confluence and TSG could influence broader adoption of automated workflows in performance reporting and verification, Handzy said.
Both companies have strong reputations in the GIPS community, and Handzy believes the collaboration lowers a barrier that may have discouraged some firms from pursuing GIPS compliance.
“We expect that this collaboration will help spread the adoption of GIPS because together we’ve made the process streamlined and hassle-free,” he said.
