• An Investment Policy Statement (IPS) is a formal document drawn up by a portfolio manager or financial advisor and a client that sets out the general rules for the manager.

  • This statement presents the general investment goals and objectives of the client and describes the strategies that the manager should use to achieve these goals.
  • Specific information on issues such as asset allocation, risk tolerance and liquidity requirements is included in the investment policy statement.
  • A well-designed IPS allows both the manager and the investor to focus on long-term goals.