What is an IPS Statement?
An IPS statement is a document that is created to identify an investors financial goals and objectives and to get them down on paper. The document generally contains specific information about an individual’s risk tolerance, time horizons, liquidly needs, and special circumstances as well as identifying acceptable parameters for achieving these goals. The IPS serves as the backbone for the long-term management of a client’s investment portfolio. IPS statements are typically structured around percentage allocations to major asset classes.
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Individuals who engage in ongoing financial planning are more likely to reach their financial goals and have greater peace of mind. They have a strategy in mind. As financial planners, we offer you a comprehensive, written financial plan specific to your individual situation.
As asset managers, we design and implement customized portfolios that are tax-efficient, diversified, low cost, and geared towards the long-term investor.
Generally speaking, an IPS should be:
- Specific to each individuals circumstances
- Dynamic and flexible enough to allow a financial advisor to make tactical decisions within the framework of the broader IPS guidelines
- Adaptable to changing client needs
- Easily modified (with proper analysis and approvals)
- Serve as a clear and constant reminder of an individuals goals and ability to tolerate risk
- Identify the roles and responsibilities of the parties to the advisory relationship
- The frequency and timeframe for review (annually or when a clients situation changes materially)
- Should capture any specific investment constraints for a given client
- Should address the investment time frame for the specific accounts being managed
- Capture any unique circumstances that are client specific
- Should address any short term cash or liquidity needs for the client
- Should address a clients current tax situation