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Investment Policy Statement

Whether you have a need for personal wealth management or are acting as a trustee managing assets on behalf of others, we encourage all investors to adopt an Investment Policy Statement (IPS). An Investment Policy Statement helps define the goals of the individual or organization and provides clear and concise communication to the investment manager about the risk profile, constraints, and expectations of the portfolio.

Soundly conceived, persistently followed, long-term policy is the pathway to successful in investing.
Charles D. Ellis (1993)

When properly constructed the investment policy statement should:

In the case of an individual or family, a financial plan may accomplish many of the objectives of the Investment Policy Statement. It may be used to record and accommodate for short term, intermediate, and long term goals. Even if a comprehensive plan is in place, however, it is important for both the investor and the advisor to be aware of the investor's risk tolerance and that should be clearly articulated.

For an endowment, foundation, or retirement plan, where a trustee or board is making decisions on behalf of a larger organization, the Investment Policy Statement is even more critical. In many cases, as board turnover occurs, the IPS may be the only form of communication between past and current board members about the original intent of the entity for the management of the assets. For this reason, the scope of the document must be clearly defined and provide specific direction to all parties involved.

A review on at least an annual basis of the IPS is highly recommended to make sure it continues to reflect the goals and objectives of the individuals or organization.