Investment Policy Statement for a Moderate Risk Client

Imagine you are a financial advisor working with a new client, a 45-year-old individual named Alex, who is seeking guidance on managing their investment portfolio. Alex has a moderate risk tolerance and is focused on achieving a balance between capital preservation and growth. You are required to draft an Investment Policy Statement (IPS) for Alex.

Please outline the key components that should be included in Alex's IPS and explain why each component is important for effective portfolio management.