Have you ever wondered why we at Perspective Financial Services have annual reviews and discussions about your Investment Policy Statement (IPS)? A well-written, up-to-date IPS is a powerful communication and planning tool, with three key benefits:

  1. It allows you and your advisor to discuss and document your goals, as well as your tolerance for investment risk, to create an effective investment strategy and asset allocation.
  2. It helps clarify how and why your portfolio’s investment mix determines its performance over the long-term. (The chart below offers a good visual regarding why asset allocation is so important.)
  3. It enables you and your advisor to periodically re-visit your goals and strategy, to ensure they remain appropriate to changes in your life and needs.

An Investment Policy Statement (IPS) is a document prepared by an investment manager and their client. It states the goals and the strategy for how to reach those goals through a specific investment mix agreed upon by the client and the investment manager. It’s prevalent within the institutional investment management space and is becoming more so at the individual or retail level. Perspective Financial Services has utilized the IPS for its clients since Mike McCann founded the firm in 2003.

Your Investment Policy StatementCall or email your advisor if you have any thoughts or questions about your IPS. We’re happy to go over it with you any time.