The primary purpose of verification is to establish that a firm claiming compliance with GIPS has adhered to the Standards. Verification is the review of an investment management firm’s processes and procedures by an independent third party for compliance with the GIPS standards. 

Verification is performed with respect to the entire firm, not on specific composites, and it tests: 
 

•  Whether the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis, and 
•  Whether the firm’s processes and procedures are designed to calculate and present performance results in compliance with the GIPS standards.

The end result of the verification is a written verification statement, which attests to your firm’s claim of compliance.

Third-party verification brings credibility to the claim of compliance and supports the overall guiding principles of full disclosure and fair representation of investment performance. Many firms have also found that consultants and some institutional investors require a firm to be GIPS verified before moving forward in manager searches.