Understanding the Purpose of an Investment Policy Statement

Very Easy Private Wealth Management Investment Policy Statement

As part of the investment planning process, an investment policy statement (IPS) serves as a critical document for any investor. An IPS outlines specific financial goals, investment parameters, and risk tolerance based on the investor's unique circumstances. It ensures a disciplined investment approach and provides clear guidelines for portfolio management.

Considering this context, which of the following best describes the primary purpose of an IPS?

To ensure compliance with regulatory requirements for asset management.

To establish the investor's specific financial goals and investment strategy.

To outline historical performance benchmarks for the portfolio.

Hint

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