Creating an Investment Policy Statement for a High-Net-Worth Individual

Imagine you are a financial advisor tasked with developing an Investment Policy Statement (IPS) for a high-net-worth individual, John Smith. John is a 50-year-old retired executive with a moderate risk tolerance, seeking to preserve capital while achieving a modest growth of his portfolio. He has significant savings of $3 million, with annual income requirements of $120,000 from his investments. John also wishes to leave a legacy for his two children.

Your task is to construct a comprehensive IPS that addresses John's investment goals, risk tolerance, time horizon, liquidity needs, and any additional considerations he may have. Be sure to include specific asset allocation strategies and investment constraints based on John's circumstances.