Investment Policy Statement


Also found in: Acronyms.

Investment Policy Statement

In a discretionary account, an agreement between a portfolio manager and a client stating the client's needs and desires with regard to the portfolio. That is, the IPS states how the client expects the portfolio to perform and what the portfolio manager may and may not do in order to achieve this goal. The IPS prevents misunderstandings, such as when the manager takes on too much or too little risk for the clients investment goals. See also: Asset management.
References in periodicals archive ?
Where trustees are looking to delegate any of their investment functions to agents, the preparation of an investment policy statement is a legal requirement.
They own their own respective wealth advisory firms, and together wrote the best-selling book Creating an Investment Policy Statement (FPA Press, 2005).
The survey summarizes the most popular components of investment policy statements for defined benefit plans, 401(k) plans, money purchase pension plans, 403(b) plans, and welfare plans.
It is also good practice to review the investment policy statement periodically since the goals and/or objectives may change over time.
Now, many associations are adopting detailed investment policy statements, and as a subset of those policies, asset allocation models that portray their return objectives and risk tolerance.
Cleary Gull's investment advisory businesses help clients achieve their financial and business goals by advising on financial planning, investment policy statement creation and portfolio construction.
This is typically set forth in an investment policy statement outlining how the committee will select, track, and unselect the managers, along with other operational procedures.
Planning -- Analyze an investor's portfolio, their financial situation and prospective wealth scenarios to quickly design a tailored investment plan and comprehensive Investment Policy Statement.
An investment policy statement defines the goals of a pension plan's investments and how it should manage retirement assets.
Together they should determine the criteria for investment selection, and an Investment Policy Statement should be put in place in order to facilitate annual review discussions.