What are they? Why are they important?
Provided by Financial Advisor
A self-fulfilling policy. An investment policy statement (IPS) is a document which helps the client and financial advisor stay “on the same page” by clearly stating the expectations and responsibilities of the client and advisor.
A standard IPS will usually take into account the client’s general investment goals and objectives, but also more specific elements, such as a breakdown of asset allocation targets, any control and monitoring procedures to be followed by everyone involved in the portfolio, and concrete procedures for making any future changes to the IPS.1
Read the fine print. Because an IPS includes your broad investing goals and objectives, it’s important to read through it fully. For some, it may be helpful to think of an IPS as a way for you to communicate with your financial advisor, even if you’re unable to be reached. This may also be helpful when quick action is necessary.
That’s because an IPS sets the parameters within which the financial advisor will operate in order to help you reach a set of preestablished goals. So, if during your read through of an IPS anything feels uncomfortable, a conversation with your financial advisor is a great idea.
Invest in a conversation. An IPS is a great way to make sure you’re with a financial advisor who understands your risk tolerance, goals, and time horizon. After all, an investment policy statement can be deeply personal and works best when tailored to your circumstances. However, if you happen to find an element of your IPS that doesn’t fit exactly right, don’t despair. A conversation with a financial advisor can often help create an investment statement that’s as unique as your portfolio may be.
If you ever have any questions about your investments or retirement plans, please feel free to give me a call at 801-545-0696.
Stonecreek Wealth Advisors, Inc.
11650 S. State Street, Suite 360
Draper, UT 84020
1 – cfainstitute.org/membership/professional-development/refresher-readings/2018/the-portfolio-management-process-and-the-investment-policy-statement [06/18/2019]
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