An Investment Policy Statement (IPS) is a vital document that outlines the guidelines for investment decisions within an individual financial plan, or as part of the efforts of a business, trust, or family office. This document is critical because it provides a framework for how investments should be managed, who is responsible for making decisions, and what the investment objectives are. Creating an IPS requires careful consideration and collaboration between investors and fiduciaries. In this blog post, we will discuss what to include in an IPS, how to draft it, and the critical questions that investors should discuss.
These articles will help discuss important parts of the Investment Policy Process and draft an IPS:
- What to include in an Investment Policy Statement?
- How to draft an Investment Policy Statement?
- Critical questions that investors should discuss
- What are the Fiduciary Responsibilities?
When creating an Investment Policy Statement (IPS) for a trust or family office, it is essential to use a fiduciary process and an Accredited Investment Fiduciary (AIF®). An IPS outlines the investment objectives, risk tolerance, and guidelines for managing assets or property on behalf of a client or beneficiary. The fiduciary process and AIF® help ensure that the IPS is created with the highest level of care and diligence and that the interests of the client or beneficiary are protected.
A fiduciary process is a structured approach to managing assets or property that emphasizes transparency, accountability, and adherence to fiduciary responsibilities. This process includes four key steps: (1) establish investment objectives and goals, (2) develop an investment strategy, (3) implement the investment strategy, and (4) monitor and evaluate the investment strategy’s performance. By following the fiduciary process, fiduciaries can make informed decisions based on the client or beneficiary’s needs and objectives, and minimize the risk of conflicts of interest or other ethical breaches.
An Accredited Investment Fiduciary (AIF®) is a professional who has completed specialized training and certification in fiduciary standards and best practices. AIF®s have demonstrated their knowledge and expertise in managing assets or property on behalf of clients or beneficiaries and upholding their fiduciary responsibilities. By working with an AIF®, fiduciaries can ensure that their IPS is created with the highest level of care and diligence and that they are complying with industry best practices and regulatory requirements.
In conclusion, using a fiduciary process and an Accredited Investment Fiduciary (AIF®) is critical when drafting an Investment Policy Statement (IPS) for a trust or family office. These tools help ensure that the IPS is created with the highest level of care and diligence and that the interests of the client or beneficiary are protected. By following a structured process and working with a qualified professional, fiduciaries can manage assets or property in accordance with best practices and fiduciary standards.
