Benefits of compliance with GIPS least likely include?

• A. Elimination of in-depth due diligence for investors
• B. Strengthening internal controls
• C. Participation in competitive bidding
• D. Enhanced credibility with clients

Answer: (A)

GIPS compliance signals transparent, consistent performance reporting, which tends to bring several practical benefits to a firm. It helps strengthen internal controls because producing standardized, comparable numbers across accounts requires disciplined methodologies, governance, and data verification. It also makes a firm more competitive in bidding, since clients can compare performance on a like-for-like basis and are more confident in the credibility of the numbers. Relatedly, GIPS compliance enhances credibility with clients, as standardized and potentially verified performance data is easier for clients to trust and validate.

Eliminating or reducing the need for in-depth investor due diligence, however, isn’t one of the outcomes. GIPS aims to improve transparency, not substitute for thorough due diligence. Investors still perform their own checks on strategies, risks, fees, and data integrity, and GIPS compliance does not guarantee future results.