Why write an Investment Policy Statement (IPS)? To start, an IPS helps ensure you and your investment advisor remain on the same page.

An IPS is a written financial plan focused on investment strategy. Six key elements should be included in an IPS written for an individual investor:

  1. Scope and Purpose
  2. Risk and Return Objective
  3. Time Horizon
  4. Tax Considerations
  5. Expected Withdrawals and Deposits
  6. Investment Preferences

A well-written, personal Investment Policy Statement has many benefits, and the CFA Institute identifies two important reasons to have one…

Perhaps most importantly, the IPS serves as a policy guide that can offer an objective course of action to be followed during periods of market disruption when emotional or instinctive responses might otherwise motivate less prudent actions. The IPS is a highly customized document that is uniquely tailored to the preferences, attitudes, and situation of each investor.

Download an example of a concise, practical IPS. Call the pros at  Successful Portfolios at (727) 744-3614. We can help you create your own custom-written Investment Policy Statement.

We recommend the CFA Institute’s Elements of an Investment Policy Statement for Individual Investors for further reading. Download ↓

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