What can and can't a firm say in advertisements under GIPS advertising guidelines?

The GIPS Advertising Guidelines allow firms to reference their GIPS compliance in marketing materials without presenting the full compliant performance report. However, there are strict requirements about what must be included and what is prohibited.

What an Advertisement Must Include:

Any ad that claims GIPS compliance must contain at minimum:

1. The firm definition — Name and description of the firm as defined under GIPS
2. How to obtain the full GIPS report — A statement directing the reader to request the complete compliant presentation
3. The GIPS compliance statement — A specific required disclosure that the firm claims compliance and that the claim has been prepared in accordance with GIPS

If Performance Is Shown in the Ad:

If the firm chooses to show returns, the ad must also include:

• Composite description and benchmark
• Whether returns are gross or net of fees
• The currency
• The time period
• One-, three-, and five-year annualized returns (or since inception if the composite is less than five years old)
• The most recent period's return

What Is Prohibited:

• Cherry-picking periods — You cannot show only Q4 2025 returns because they were strong while omitting the full year
• Simulated or backtested returns presented as actual — Any hypothetical performance must be clearly labeled
• Misleading composite names — A composite called 'Conservative Growth' that holds 90% speculative small caps violates the spirit of GIPS
• Claiming 'GIPS verified' in ads when only self-declaring compliance — Verification and compliance are distinct claims
• Partial compliance claims — A firm cannot say 'we comply with GIPS except for private equity composites.' Compliance is all-or-nothing at the firm level.

Common Exam Trap: A firm that presents only its three best-performing composites in an advertisement while burying the underperformers in a footnote is violating GIPS advertising guidelines. The guidelines don't require showing all composites in every ad, but any representation must not be misleading.

Important Distinction: The full GIPS-compliant presentation (given to prospective clients upon request) has far more detailed requirements than an advertisement. The ad is essentially a teaser that must not mislead and must direct readers to the full report.

Practice identifying GIPS advertising violations in our CFA Level III question bank.