Benefits of a Formal Investment Policy Statement
An investment policy statement (IPS) summarizes a client’s circumstances, objectives, and constraints and outlines policies to accommodate them. It is a document of understanding that can help protect both the client and the adviser.
For clients, developing an IPS can be an educational process that results in greater understanding of the investment process and less reliance on blind faith in an adviser. If a second opinion or change in advisers becomes necessary, the document can help the new adviser appreciate the situation.
For an adviser, having the IPS creates a framework for decisions that can be referred to when particular decisions are questioned.
For more information, see all articles on: Asset Allocation, Behavioral Finance, FInancial Planning, Portfolio Management See also:
The Intelligent Investor: The Classic Text on Value Investing
Financial Statement Analysis: A Practitioner's Guide, 3rd Edition
Managing Investment Portfolios: A Dynamic Process (CFA Institute Investment Series)
