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What is an Investment Policy Statement?

  • An Investment Policy Statement (“IPS”) is a document created by the Plan’s investment committee (e.g., those charged with making investment decisions for the global retirement and savings plan) to help establish and record its own policies in order to assist in future decision-making, to help maintain consistency of its policies by future committee members or to clarify expectations for prospective money managers who may be hired by the committee

  • The presence of an IPS helps to clearly communicate to all relevant parties the procedures, investment philosophy, guidelines and constraints to be adhered to by the parties. The IPS should provide guidance for how investment decisions will be made; it should not be a list of the specific securities to be used

  • A properly written investment policy statement can be critical in minimizing the legal liability of those serving in a fiduciary capacity (e.g., plan trustees, trustees of irrevocable trusts, and investment committee members)

  • Use of an IPS with each investment client is now considered a best practice and is required by the trustee in many jurisdictions

  • The presence of an IPS helps to create an environment of transparency in the relationship between client and advisor. The IPS offers clients a better understanding of what to expect from their advisor. That clarity generally helps to build a much higher level of trust and respect and it helps ensure the investment manager is aware of the expectations of the client

We can assist in establishing an IPS for your global plan.

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