Investment Policy Statement for a High-Net-Worth Retiree

You are a financial advisor creating a comprehensive Investment Policy Statement (IPS) for a high-net-worth client named Mr. Harrison, a 62-year-old retiree with a net worth of $12 million. Mr. Harrison seeks to preserve his capital while generating sufficient income to fund his lifestyle, which includes maintaining his residence in the upscale suburb of Glenview, Illinois, and participating in philanthropic activities. He has a conservative risk tolerance and expresses a desire to leave a meaningful legacy for his children and grandchildren.

Mr. Harrison has outlined his priorities as follows: 1) An annual withdrawal target of $600,000, 2) A preference for investments in tax-efficient vehicles due to a substantial existing tax burden, 3) A balanced allocation between income-generating assets and capital preservation, specifically mentioning a preference for municipal bonds, dividend-paying stocks, and a portion in alternative investments like real estate,

4) Keeping his investment costs to a minimum, and 5) Avoiding highly volatile investments. Construct an IPS for Mr. Harrison that reflects these priorities while adhering to the best practices in private wealth management.