How to Write an Investment Policy Statement, 2nd Edition

CHAPTER 10

SAMPLE IPS TEMPLATE #2

For a High-Net-Worth Individual Setting Up a Family Trust

Following is another example of an Investment Policy Statement. Although similar in nature to the prior IPS, this statement is designed for the needs of a high-net-worth individual investor, rather than a plan participant. As noted previously, the IPS is universally applicable to every type of fiduciary position—both for ERISA purposes, as well as for the management of everything from high-net-worth individuals to family trusts, foundations, endowments and eleemosynary funds.

While ERISA covers the defined contribution/benefit market, the Uniform Prudent Investors Act (UPIA) governs private trusts and eleemosynary funds. An (IPS) can be used in a variety of situations by advisors, even though it may focus on ERISA. The following variation can be used for an Individual Family Trust.

Executive Summary

Name__________The Jones Family Trust___________

Name of family trustees: __________________________________

Table of Contents Investment Policy Statement

PART I—Purpose

The purpose of the Investment Policy Statement is to provide written and formal financial goals and financial objectives.

PART II—Investment Management Objectives

Defines the nature of the relationship of how the financial advisor and individual (plan sponsor or company) will work together: how each party will manage the investment process; define levels of acceptable risk; and expected time frame and rate of returns objectives. ...