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Arguably, the most consequential element of any portfolio is the Investment Policy Statement (IPS). The Investment Management Council even goes so far to say, "This step (creating the IPS) is one of the most important functions performed in the development and supervision of an investment program." And qualified plans under ERISA are clearly encouraged to have an IPS.
So exactly what is an Investment Policy Statement? To be brief, it is the all encompassing document that basically advises how the portfolio will be invested or, in the case of participant directed retirement plans, how the investment options will be selected. At Strategies, LLC, we construct IPS's which combine elements of planning and philosophy and cover the steps in the management process. For example, we may start with information about the organization and its portfolio, work through administration, asset and style allocation, manager selection, participant education, and finish with performance monitoring. As one can imagine, creating an IPS is an immense task and requires a sound understanding of the capital markets, qualified plans, and fiduciary issues. The reality, though, is that properly creating and following an IPS is probably the only way to attain a portfolio's goals. At Strategies, LLC, one of our strengths is creating Investment Policy Statements and reviewing them as portfolios or plans mature - we have the tools, expertise, and capacity to develop sound IPS's that are tested through time and, maybe more importantly, individualized for each client and situation. |