What is an Investment Policy Statement?
What is an Investment Policy Statement?
An Investment Policy Statement (IPS) is a written roadmap for managing your investment portfolio. It’s a mutually agreed-upon document between you and your advisor that defines your goals, outlines investment strategies, and establishes rules of engagement. The IPS is especially important when a fiduciary relationship exists and is widely regarded as a best practice in modern wealth management.
Why does it matter?
Investing can be emotional. An IPS provides a structured, disciplined approach that helps reduce reactionary decision-making and reinforces long-term thinking. It lays out a clear process for confronting complex financial choices and ensures that decisions align with your overall objectives.
Whether you’re an individual investor, a family, or an institutional plan sponsor, an IPS brings clarity and accountability to your financial plan.
A strong Investment Policy Statement should address four essential areas:
Objectives
Define your investment goals, risk tolerance, time horizon, and return expectations. This section ensures that everyone is working toward the same target with realistic, measurable benchmarks.
Asset Allocation Policy
Establish a diversified structure for your portfolio, identifying the specific asset classes that align with your goals and how they should be proportionally allocated. This helps guide disciplined investing through changing markets.
Management Procedures
Create a process for selecting, reviewing, and adjusting your investments. This includes how performance is evaluated and how changes in your life or the markets will be addressed.
Communication Protocols
Define how and when updates will be shared between you and your advisor. This includes setting expectations around reporting, performance reviews, and who is responsible for various aspects of plan implementation.
At MVM Advisors, your IPS is more than just paperwork
With MVM, your IPS is a practical guide that:
Clarifies your goals and what you expect from our relationship
Gives us a better understanding of how to meet your unique needs
Brings structure and confidence to investment decisions
Helps you understand our process and recommendations as we work toward shared financial outcomes
Whether you’re investing for retirement, managing a 401(k), or building generational wealth, an IPS brings discipline, clarity, and peace of mind to the process.
MVM Advisors is a fee-only fiduciary RIA specializing in retirement planning, 401(k) design, and comprehensive investment strategies.
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