Investment Policy Statement ("IPS")
As a Registered Investment Advisor you have an investment philosophy. It may be "buy and
hold," quarterly asset reallocation, aggressive market timing, or other methodology.
Your Form ADV provides the client with full disclosure about you, your services, and
fees. Despite your best professional advice, you are still obligated to manage your
clients portfolios based on their individual needs.
As a fiduciary, an advisor must invest in the best interest of its clients. Each
client's account must be managed on the basis of the client's financial situation and
investment objectives, and in accordance with any reasonable restrictions imposed by the
client on the management of the account.
The purpose of an IPS is to allow your clients to state expectations and limitation on
the management of their portfolio. An IPS specifies how the client's investment
portfolio will be funded.
- The IPS is the result of the advisor and client working together to establish
criteria for selecting investments and measuring performance.
- It is the client's way of documenting what has been communicated to the advisor.
- It is a document the advisor should refer to whenever making changes in client
portfolios. Even when the advisor uses model portfolios, investment trading may need
to be tweaked to comply with the client's IPS.
- It serves as compliance documentation for the regulators to show that the advisor is
managing the portfolio based on the individual needs of each client.
- When each party understand and agree to the IPS, then the client(s) and the advisor
The sample IPS is delivered electronically in WORD for your easy customization. With
just a few easy modifications you can craft your own customized template that fits your
operations. You can then complete the data for each of your clients, creating their own
The IPS is available here as a stand-alone document or included in the RIA Forms and
RIA Forms and Research Library
The RIA Library includes 22 different packages, each of which contain
multiple forms and/or information sheets. Sampling includes: Privacy
Compliance Calendar, Advertising Rule, Year-End Tools, Best Ex, and more.
to find out more.