How to Write an Investment Policy Statement, 2nd Edition

CHAPTER 8

SAMPLE IPS TEMPLATES

Once you have taken the specific actions and gathered the required material needed to assemble an IPS, any fiduciary is ready to start writing an IPS for their client. In this section we will provide two sample IPS templates that can be used as a guideline when creating, or comparing, your own documents. The verbiage, content, and descriptions of the IPS samples will clearly need to be adapted for each different client and investment scenario you have. However, by following the eight steps outlined, understanding the logic employed in each, and inserting the appropriate language, drafting an IPS will be easier and more consistent once you start using the basic framework provided.

Two Distinct IPS Samples

Two distinct IPS samples are provided. The first is intended to serve as an example of the type of information that would be included in a well-written IPS for a participant-directed 401(k) that intends to comply with ERISA Section 404(c). The second is designed for the needs of an individual investor, outside of the 401(k) or plan participant. While it is written for a high-net-worth individual setting up a family trust, similar guidelines apply to structuring an IPS for an individual in any income bracket.

Organization of Templates

Please note that each IPS is comprised of seven to eight distinct sections. At the beginning of each section are instructions and explanations of the purpose of the section, followed by examples of relevant language. ...