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What is an IPS?

IPS stands for Investment Policy Statement – and every Board or Trust should have one. 

The IPS is a document which states your investment policies, and how you will govern and manage your investments.

A good IPS should include the following:

  • A clear description of the purpose of your overall objectives. For example, ‘to provide regular income to meet the annual expenses’
  • A description of the roles of the different parties, including the delegation of certain decisions. For example, stating the Trust will decide on the investment goals, and the Adviser will provide the strategy and recommendations on how to get to the goals
  • Quantification of the goals. For example,  ‘we are wanting to achieve a real return of 4% per annum after fees and expenses over a five-year period’
  • Statement of the different policies regarding the investment of the funds. For example, liquidity and cash flow.
  • Reporting, including how any breaches of the IPS will be reported. The frequency and content of reporting, including setting up a peer group to judge the overall performance.
  • And many other factors.

We recommend this document be reviewed regularly. IWIinvestor can help with the development of this document. Please contact us for more information.

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