Investment Policy Statements for every one yes or

or Register to post new content in the forum

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Jan 15, 2010 12:23 pm

<?: prefix = o ns = "urn:schemas-microsoft-com:office:office" /> 


I use Investment Policy Statements (IPS) with all my fee-based clients; I currently do not use IPS with my commission-based clients. I am thinking about writing IPS for all clients. My question is should I?



As I see it there are several plus to IPS, a written and signed record of what was agreed to between advisor and client, a framework for evaluating investment performance, detailing the plan’s investment-related goals and objectives, setting clients expectations about client communication and reminding clients of their long-term goals during turbulent markets and a break or a check on emotional or hastily decisions.



IPS also have several negatives, they can hand cuff the advisor from acting quickly in turbulent markets, a written record of what was agreed to can be a negative if you do not perform as agreed to.


 
JackBlack 
Jan 15, 2010 1:55 pm

Same as you.  IPS for all fee-based clients, not commissioned.  Unless it's a discretionary account, what's the point of an IPS for a non-discretionary commissioned account?

Jan 15, 2010 1:59 pm

I would guess, protection for the FA. The client agrees, in writing, to their risk tolerances and to what would be appropriate. No backsliding on their part in three years, saying "I never agreed to that!".

Jan 15, 2010 5:47 pm
B24:
 
The reason I am think of doing IPS for all my clients is CYA. The reason I may no do it is the time factor.