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Investment Policy Statement

September 3, 2013

If you were a CEO and were hiring a top echelon person, you would have a contract spelling out their duties and responsibilities.  In managing your individual financial affairs, an investment policy statement (“IPS”) serves this purpose, even though it is not a binding contract.

The IPS is written between you and your advisor or portfolio manager and puts your goals, approach to investing and the amount or type of risk you feel comfortable with in writing.  The purpose of the IPS is to get all your advisors and participants in your financial security seeking to agree on a methodology to lead you toward your goals.

The IPS also identifies the type of investments needed to attain your goals, the expected returns from each investment category, lays out the asset allocation strategy so that your goals will be achieved based on your current investment return assumptions, the role taxes will play in the execution of the plan, sets forth monitoring, reporting, call and meeting intervals, rebalancing periods and methods so that your allocation will continue to be what was originally agreed upon, and circumstances when your strategy and goals might have to change.  Also included will be the basis for your advisors’ compensation.

Preparing an IPS will take serious thought and some time, but miniscule effort when measured against the financial security benefits you are seeking for the rest of your life.

Click here for a link to an IPS template you can download.

2 Comments leave one →
  1. 6hawthorne permalink
    September 3, 2013 1:44 pm

    Hi Ed When hire you have to list the responsibilities with goals for the account and howthe person is going to complete them . I could go in to more detail but i do;t havetime to write long essays Bob Naglerl

  2. Michael P. Mattimore LLC permalink
    September 3, 2013 3:43 pm

    Hi Ed,

    Thanks for the IPS template.



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