Investment Policy Statement

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Dec 30, 2006 5:09 pm

I am curious how many of you use a formal investment policy statement

with clients. And if so, what is the structure, look, and feel of the

document? I am trying to get my hands around my whole "approach" with

clients. I need to improve on my initial delivery, and I think am

investment policy statement would help.



Also, along the same lines, do most use a formalized professional Bio?

Dec 30, 2006 5:42 pm
Broker24:

I am curious how many of you use a formal investment policy statement

with clients. And if so, what is the structure, look, and feel of the

document? I am trying to get my hands around my whole "approach" with

clients. I need to improve on my initial delivery, and I think am

investment policy statement would help.



Also, along the same lines, do most use a formalized professional Bio?



You should honestly check with Jones compliance first and see if they'll even let you use an IPS.

Dec 30, 2006 6:46 pm

Why would you use something that you don't have to use and could be used against you?

Dec 31, 2006 12:56 am
Broker24:

I am curious how many of you use a formal investment policy statement

with clients. And if so, what is the structure, look, and feel of the

document? I am trying to get my hands around my whole "approach" with

clients. I need to improve on my initial delivery, and I think am

investment policy statement would help.



Also, along the same lines, do most use a formalized professional Bio?





I use IPS statements. Basicly you start with



1. Description of the client and investment goals/funding targets.



2. Plan for reaching those goals



3. Investment Policy that describes reaching those goals and any extra criteria.



----



For example if you have client that doesn't want to invest in tobacco,
you can specify that as an investment policy and plan on how to deal
with that issue.



(American Century Livestrong portfolio's are no tobacco, Ariel Mutual funds, and many other SRI funds are the same etc.)



----

By the time you are done with this process, you have a mutually agree'd upon strategy and you now know exactly what the client wants, and can review this yearly.



You can make things as vague or specific as you want. Usually the
investment polciy just say that the account will be broadly diversified
via investments in diversfied equity/FI funds except for an overweight
in energy via an energy centric mutual fund etc etc.



You are mostly codifing what you would do anyways.

Dec 31, 2006 1:54 pm

I do realize that Jones may not approve of it. I am just doing some

research to see what others have done first.

Dec 31, 2006 2:21 pm

Why research what you can't do?  You're putting the cart before the horse.

Jan 1, 2007 12:46 pm

The client may suie an investment adviser who does not follow the terms of the investment policy.  An investment adviser who ignores the investment policy statement may be held liable for breach of fiduciary duty, even if the plan's assets have increased under its management. 


Page 5-15 of Secruities Training Corporation Manual for Series 66 exam

Jan 1, 2007 7:44 pm
My Inner Child:

Why would you use something that you don't have to use and could be used against you?


If you have to ask, you'll never know.