Revising Investment Policy Statement for a High-Net-Worth Client

During a recent review meeting, a private wealth manager, Jennifer, found that one of her high-net-worth clients, Mr. Smith, had become increasingly concerned about market volatility and was considering altering his investment strategy. Mr. Smith’s initial investment policy statement (IPS) emphasized long-term growth with an allocation of 70% equities and 30% fixed-income securities. However, he is now contemplating a more conservative approach due to his concerns over potential economic downturns and his upcoming retirement.

In light of this situation, outline the key components that should be included in a revised investment policy statement for Mr. Smith. Discuss how this revised IPS will address his concerns about risk, liquidity, and market conditions while still aligning with his long-term financial goals. Additionally, explain the role of communication in effectively managing Mr. Smith's expectations during this transition.