- Posted by sfg2020
- On March 15, 2020
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Posted by Brian L Spahr, SPAHR FINANCIAL GROUP LLC on March 15, 2020
- Investor Profile Questionnaire.
- Statement of Objectives
- Portfolio Investment Allocation
The purpose of an Investment Policy Statement (IPS) is to establish clear guidelines for your investment portfolio. In addition, the statement also incorporates accountability standards that will be used to monitor the progress of the portfolio’s investment program. Advisors typically act in a fiduciary capacity with respect to the portfolio, and are accountable to their client(s) for overseeing the investments owned by or held in the portfolio.
INVESTOR PROFILE / RISK CAPACITY.
Making a wise investment choice is dependent on a proper and prudent assessment of the profile as an investor. The utilization of an Investor Profile Questionnaire is a starting point for preparing an investment plan. The information provided through this exercise is used to prepare your IPS, a document generated to reflect an investment strategy that is appropriate for you.
When thoughtfully and accurately completed, this profile can be an effective tool in assisting advisors in recommending a portfolio best suited for investors. It is the starting point in coordinating the best portfolio model that is used with other client information, conversations, and data.
STATEMENT OF OBJECTIVES .
The IPS will be developed with consideration by the client of a wide range of policies, and describes the prudent investment process the client deems appropriate. This process includes offering various asset classes and investment management styles that, in total, are expected to offer the opportunity to diversify the portfolio in a manner consistent with the specified risk and return requirements of the portfolio.
The objectives of the portfolio are to be matched with a portfolio that is consistent with the investors’ requirements and meets the needs of the client, including the correct allocation of growth, income, preservation of capital, time horizon, and risk tolerance, as well as other factors.
The investor’s time horizon, current financial condition, and several other factors suggest collectively some interim fluctuations in market value and rates of return may be tolerated in order to achieve the long-term objectives.
PORTFOLIO INVESTMENT ALLOCATION.
Advisors recognize that the strategic allocation of portfolio assets across broadly defined financial assets and sub-asset categories with varying degrees of risk, return, and return correlation will be the most significant determination of long-term investment returns and overall portfolio asset value stability.
Diversification across and within asset classes is one of the primary means by which the advisor expects the portfolio(s) to avoid undue risk and large losses over long time periods. It is expected that the portfolio’s actual asset allocation will vary from its target asset allocation as a result of the varying periodic returns earned on its investments in different asset and sub-asset classes. Portfolios are re-balanced to their target asset allocation based on the IPS criteria.
The profile questionnaire is utilized as a strong starting point to determine the appropriate client model(s), and can be adjusted either with more or less risk exposure and volatility, based on initial and ongoing client communication, specific parameters, and any other factors that impact the required investment policy allocation model.
Brian L. Spahr, CFP / SPAHR FINANCIAL GROUP, LLC
Investment Advisory – Risk Management
Providing Advice We Use