Investment Policy Statement Development

The typical investor often makes inappropriate decisions due to a lack of information and a nonsystematic approach. Emotional or behavioral factors can also lead to improper decision-making. By using an Investment Policy Statement, investors have a written document to make prudent and rational decisions.

By creating an Investment Policy Statement, you’ve established a plan to confront complex issues, and have identified a systematic discipline for decision-making.

In doing so, you’ll have the advantage of clarity with your expectations and goals. You will better understand what to expect in the advisory relationship.

With an Investment Policy Statement, both the advisor and client can make prudent, rational decisions about investments with confidence.

• Setting Objectives
  Set clear and definable expectations, risk tolerance, return objectives and guidelines for investments.
• Defining the Asset Allocation Policy
  Create a structure and identify the investment asset classes used to achieve a diversified portfolio and determine how those assets are best allocated toward larger goals.
• Management Procedures
  Provide a guide for selecting, monitoring and evaluating the performance of the invested assets and how to appropriately manage changes.
• Communication Procedures
  Establish a clear protocol for communicating both processes and objectives among all parties involved, while assigning responsibility for implementation.