Treat the IPS as the portfolio operating system
Identify the core decisions an IPS must lock before markets test the investor.
The move: make the policy do work before emotions arrive. A serious IPS answers four questions. What is the money for? What constraints shape the portfolio? What allocation and risk limits will govern implementation? How will the portfolio be monitored and changed? If those answers live only in conversation, they will drift when performance hurts. The IPS protects both the investor and the manager. The investor gets a visible link between life goals and portfolio choices. The manager gets a standard for action and restraint. When a client asks to sell after a drawdown, the advisor can return to the…
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