Investment Policy Statement for Retirement Planning

You are a financial advisor preparing an Investment Policy Statement (IPS) for a high-net-worth client named Laura, aged 55, who is looking to transition into retirement over the next five years. Laura has a current investment portfolio valued at $2 million and is interested in ensuring that her investments provide sufficient income while also growing her capital to combat inflation. She has indicated a moderate risk tolerance and a preference for a diversified portfolio that includes equities, fixed income, and alternative investments. Laura has specific preferences for ethical investing, particularly in sustainable and socially responsible companies.

In your IPS, you need to address the following:

• Determining the investment objectives and constraints based on Laura's current financial situation and future income needs.
• Outlining an appropriate asset allocation strategy and specific investment instructions.
• Including a review process to assess the IPS effectiveness in meeting Laura's retirement goals.

Provide a comprehensive IPS tailored to Laura’s financial situation, demonstrating how you would incorporate her preferences and needs into your investment strategy.