Creating an IPS for a High-Net-Worth Client

As a financial advisor, you are preparing an Investment Policy Statement (IPS) for a high-net-worth individual, Ms. Laura Chen, aged 54. Ms. Chen has a total investment portfolio worth $8 million, and she aims to maintain her current lifestyle post-retirement, which she plans to begin in six years. She has expressed a desire for moderate growth, with a maximum annual volatility tolerance of 10%.

Ms. Chen has outlined specific goals for her IPS:

1. Generate a stable income to cover her annual living expenses of $200,000.
2. Ensure that her legacy to her two children, who are currently aged 20 and 22, is preserved and potentially enhanced.
3. Maintain a portion of her portfolio in liquid assets for unforeseen expenses or opportunities.

Address Ms. Chen's investment objectives, risk tolerance, and asset allocation strategy in your IPS. Additionally, discuss how you would incorporate provisions for revisiting and revising the IPS as Ms. Chen's circumstances change.