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Investment Policy Development
The Investment Policy Statement, and the way in which it is formulated, is the cornerstone of any successful investment program. We take the necessary time with each client to ensure that the Investment Policy Statement devised for them is the appropriate one, and then monitor it on a continual basis to make sure that it remains appropriate with their objectives.
The Investment Policy Statement is dynamic in that it takes into account a changing investment environment, as well as the impact on an organization that a change in their structure may present. Investment Policy Statements also provide continuity, which is very important as the composition of decision-making bodies change.
Components of an Investment Policy Statement include:
- Goals and objectives of the Fund
- Purpose of fund
- Return requirement
- Risk tolerance
- Income needs
- Asset allocation guidelines
- Manager goals
- Return objective
- Performance relative to peers/benchmarks
- Appropriate risk/volatility levels
- Definition of “Caution” status
- Investment guidelines and restrictions
- Liquidity
- Time horizon
- Restrictions – quality/security/industry
- Roles of the parties
- Communications protocol
With new clients, the first priority is to gain a complete understanding of their current investment plan. Diagnostic reviews include an assessment of their current Investment Policy Statement, attribution analysis on their current portfolio and a historic performance review. A gap analysis is provided to shed light on where their plan stands today versus stated guidelines and goals.
Geoff Broyles CPA 5442 Miller Avenue Dallas, Texas 75206 Tel: 972.863.9830 |
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