Is an IPS legally binding?

An IPS documents governance and internal rules; it is binding on the parties that adopt and sign it per their charter or fiduciary duties. For plan sponsors covered by ERISA, the IPS can inform fiduciary standards though plan documents and trust agreements govern statutory obligations.

Can the IPS be signed electronically?

Yes. Electronic signatures are legally enforceable under the ESIGN Act (15 U.S.C. ch. 96, 2000) and UETA where adopted. Ensure intent, consent, attribution, and reproducible records to meet the four-part ESIGN validity test.

Do I need a notary or witness?

Most IPS documents do not require notarization or witnesses. Check institutional charters, trust instruments, or state law if the IPS is annexed to a notarized instrument or if a state-specific formalization is required.

How often should the IPS be updated?

Review the IPS at least annually and update within 30 days of material changes to objectives, liabilities, or regulatory requirements. Document revisions and approval dates to preserve an audit trail.

What records should be retained?

Retain signed IPS versions, meeting minutes, performance reports, and manager diligence records. Follow applicable retention periods such as IRS three-year standards and HIPAA six-year rules where health data applies.

How to ensure secure eSigning processes?

Use platforms with TLS 1.2/1.3, AES-256 encryption, detailed audit trails, and appropriate compliance certifications. For protected health information, execute a BAA prior to using the vendor.

Electronic Signature
Templates
Finance
Investment Policy Statement

Investment Policy Statement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

INVESTMENT POLICY STATEMENT

Parties and Account Identification

Client Name:

Client Entity Type

Individual Trust Corporation Partnership Other:

Advisor / Investment Manager Advisor Firm

Account Identifiers:

Effective Date: Review Frequency:

Purpose and Scope

This Investment Policy Statement ("Statement") documents the investment objectives, constraints, target asset allocation, risk tolerance, and governance procedures for the client identified above. This Statement governs investment decisions made by the Advisor on behalf of the Client for the accounts identified. It is intended to provide a clear framework for investment decision-making, monitoring, and review.

Investment Objectives

Primary Objective Target Long-Term Return Objective (annualized)

Time Horizon, Liquidity & Income Needs

Investment Time Horizon Liquidity & Income Requirements

Risk Tolerance and Constraints

Select the Client's overall risk tolerance (select one or more as applicable). The Advisor shall implement a portfolio consistent with the selected risk profile while observing constraints stated in this Statement.

Conservative Moderate Growth Aggressive

Material Constraints (legal, tax, regulatory, ethical, liquidity)

Target Asset Allocation

The target allocation and allowable ranges below govern portfolio construction. Percentages expressed as whole numbers (e.g., 40 = 40%).

Asset Class	Target (%)	Range Min (%)	Range Max (%)	Notes
Cash & Cash Equivalents
Fixed Income (Bonds)
Equities — Domestic
Equities — International
Alternatives / Other

Allowance for Tactical Deviations or Cash Overlays

Rebalancing and Trading Policy

The Advisor will monitor portfolio weights and implement rebalancing when allocations drift outside stated ranges or at predefined periodic intervals. Rebalancing shall consider transaction costs, tax consequences, and client cash flow requirements. Material departures from this policy must be documented in writing.

Rebalancing Thresholds / Frequency

Manager / Security Selection Criteria

Fees, Expenses and Conflicts of Interest

The Advisor will disclose all advisory fees, brokerage commissions, fund expense ratios, and any material conflicts of interest. The Client authorizes the Advisor to select securities and service providers consistent with this Statement, subject to duty of best execution and fiduciary obligations where applicable.

Advisory Fee Schedule

Reporting, Monitoring and Review

The Advisor will provide performance reports, asset allocation summaries, and compliance updates at the agreed review frequency. Performance will be measured relative to appropriate benchmarks and risk metrics. The Client and Advisor will review this Statement at least at the frequency indicated above or upon material changes to objectives, constraints, or market conditions.

Primary Reporting Metrics and Benchmarks

Custody, Proxy Voting and Operational Matters

Custody of assets shall be maintained with the designated custodian unless otherwise agreed. Proxy voting policies shall be described and implemented consistent with the Client's best interests. Operational responsibilities, trade settlement, and cash management procedures are set forth below.

Custodian Name Proxy Voting Policy Summary

Review, Amendments and Termination

This Statement may be amended by written agreement of the Client and Advisor. Either party may terminate the advisory relationship in accordance with the advisory agreement; termination shall not affect obligations incurred prior to termination. The Advisor will promptly notify the Client of any material changes in investment approach or conflicts of interest.

Amendment / Termination Notes

Representations, Warranties and Acknowledgements

The Client represents that the information provided to the Advisor is accurate and complete to the best of the Client's knowledge. The Advisor represents that it will act in accordance with applicable fiduciary and regulatory obligations. Neither the Advisor nor any investment product or strategy can guarantee returns or prevent loss. The Client acknowledges that investment involves risk including possible loss of principal.

Client acknowledges receipt and understanding of this Investment Policy Statement and authorizes the Advisor to act consistent with its terms. Client acknowledges disclosure of advisory fees and any material conflicts of interest identified by the Advisor.

Limitations of Liability and Indemnification

To the extent permitted by law, the Advisor shall not be liable for losses except for those resulting from willful misconduct, gross negligence, or material breach of this Statement. The Client agrees to indemnify and hold the Advisor harmless from liabilities arising from the Client's breach of representations or instructions inconsistent with this Statement.

Additional Terms

Client Printed Name:

By:

Date:

Advisor / Manager Printed Name:

By:

Date:

What an Investment Policy Statement Is and why it matters

An Investment Policy Statement (IPS) is a written document that defines an investor or plan sponsor’s objectives, constraints, governance roles, risk tolerance, asset allocation targets, and monitoring procedures. For institutional investors, retirement plans, and high-net-worth households, the IPS sets decision rules for portfolio design and rebalancing, documents permitted and prohibited investments, and establishes reporting frequency. A clear IPS reduces discretionary drift, supports consistent fiduciary decision-making, and creates an auditable record of the investment rationale used by advisors, committees, and trustees.

Why a clear IPS strengthens governance and accountability

A formal IPS clarifies objectives, assigns responsibilities, and documents acceptable risk and return parameters so stakeholders share expectations. For fiduciaries it can reduce liability exposure by demonstrating a disciplined, documented process aligned with ERISA, plan documents, or board mandates.

Who typically creates and relies on an IPS

Use the IPS as a living document reviewed on a scheduled cadence and updated when objectives, constraints, or regulations change.

Plan sponsors and trustees who govern retirement plans and need documented fiduciary processes.
Chief Investment Officers and investment committees responsible for asset allocation and manager selection.
Registered investment advisors and family office managers who implement and monitor client portfolios.

Essential sections to include in a professional IPS

A comprehensive IPS contains goals, risk tolerance, asset allocation targets, permitted instruments, rebalancing rules, performance benchmarks, reporting cadence, and governance procedures.

Purpose

State the fiduciary purpose, investor profile, time horizon, and primary financial objectives to guide all investment decisions and policy tests.

Risk Framework

Define acceptable volatility, loss tolerances, stress-test parameters, and procedures for addressing material breaches of risk limits.

Asset Allocation

Specify strategic targets, tactical ranges, permitted asset classes, and rebalancing bands that implement the risk/return profile.

Manager Selection

Describe due diligence criteria, diversification expectations, manager termination triggers, and documentation required for hiring or firing managers.

Implementation

Detail trading guidelines, cash management, proxy voting policies, and permissible instruments including derivatives and leveraged products.

Reporting & Review

Set performance benchmarks, reporting frequency, responsible parties, meeting cadence, and version control for IPS amendments.

Core information fields an IPS should record

Investor Name: Legal entity name

Document Date: Effective date

Objectives: Return and income goals

Risk Tolerance: Volatility thresholds

Asset Targets: Strategic allocation

Authorities: Signers and approvers

Step-by-step: creating and approving an IPS

Follow a structured sequence to draft, review, approve, and implement an IPS, ensuring governance and audit readiness at each step.

01

Draft: Collect objectives, constraints, and historical data for first draft.
02

Review: Circulate to advisors and legal counsel for compliance checks.
03

Approve: Obtain signatory approvals per governance matrix and record the vote.
04

Implement: Execute asset allocation, update mandates, and begin monitoring.

Configuring a digital IPS workflow

Set up a repeatable digital workflow that captures approvals, stores signed copies, and notifies stakeholders automatically.

Field	Configuration
Document Template	Store a master IPS template with versioning and controlled editing
Signer Order	Specify sequential or parallel signing and required approvers
Authentication	Choose email, SMS code, or advanced signer verification
Storage Location	Designate secure cloud repository with access controls

Where to send, file, and retain signed IPS copies

Map a clear routing path so approved IPS documents are distributed, archived, and available for audit and compliance reviews.

Primary Archive: Secure cloud storage with version controls and audit logs
Committee Records: Attach approved IPS to meeting minutes and board packages
Advisor Files: Distribute signed copy to external investment managers
Regulatory Files: Retain copies for internal compliance and external audits

Digital signing and file format requirements

Use a platform that produces tamper-evident signed documents and preserves an auditable certificate of completion.

Formats: PDF, DOCX, and standardized exports
Integrations: Salesforce, NetSuite, Google Workspace
Security: TLS in transit, AES-256 at rest

Recommended timelines and recurring deadlines

Establish a clear calendar for IPS lifecycle events including adoption, implementation, reporting, and periodic review.

Initial Adoption:

Board approval date and effective implementation timeline

Implementation Window:

90 days to align portfolios with targets

Quarterly Reporting:

Performance and compliance reports due quarterly

Annual Review:

Full IPS review at least once per year

Ad hoc Revisions:

Within 30 days of material objective or constraint changes

Common mistakes when preparing an IPS

Vague objectives that lack measurable return or risk targets, leaving interpretation to ad hoc decision-making.
Missing governance details about who has authority to make allocation or manager changes, causing delays during market stress.
Overly prescriptive allowed instruments or vendors that prevent pragmatic implementation and increase execution costs.
Failing to document review cadence and version history, which complicates audits and undermines fiduciary defense.

Risks and consequences of an inadequate IPS

Fiduciary Exposure: Greater litigation and oversight risk

Operational Errors: Misaligned portfolios and execution delays

Regulatory Scrutiny: Increased audit findings or corrective actions

Investment Drift: Uncontrolled risk concentration over time

Reputational Harm: Loss of stakeholder confidence

Documentation Gaps: Weakened defense in disputes

Real-world IPS use cases

Example scenarios demonstrate how an IPS guides decisions for different investor types and governance structures.

Corporate Pension Example

A mid-sized company adopts an IPS documenting CPI + 2% return target

Board delegates rebalancing to CIO within 5% bands
The IPS reduced allocation disputes and improved quarterly reporting clarity.

Family Office Example

A family office sets a preservation-first IPS with 5–7 year horizon

Uses private equity limits and liquidity minimums
The documented policy streamlined manager selection and estate transition planning.

Who has authority to approve and sign an IPS

Chief Investment Officer

The CIO typically prepares recommendations and signs operational approvals; in many organizations the CIO’s signature implements tactical rebalancing and manager hiring within IPS limits.

Board Chair or Trustee

The board chair or a majority of trustees formally adopts the IPS; their signature confirms fiduciary review and establishes the policy as official governance direction.

Key milestones from draft to routine review

Track milestone steps from creation through periodic reviews to maintain control and auditability of the IPS lifecycle.

01

Draft Completion

Assemble draft with objectives and constraints for committee review.

02

Committee Review

Discuss and revise draft, document dissenting views if any.

03

Formal Approval

Obtain signatures per governance matrix and record adoption.

04

Annual Reassessment

Schedule formal IPS review and update if objectives change.

Representative eSignature pricing and feature snapshot

Compare starting price and core capabilities across common eSignature providers. signNow is listed first per comparison convention.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies	Varies	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about Investment Policy Statements

Answers to common operational, legal, and technical questions about creating, signing, and maintaining an IPS.

Need help? Contact support

Is an IPS legally binding?
An IPS documents governance and internal rules; it is binding on the parties that adopt and sign it per their charter or fiduciary duties. For plan sponsors covered by ERISA, the IPS can inform fiduciary standards though plan documents and trust agreements govern statutory obligations.
Can the IPS be signed electronically?
Yes. Electronic signatures are legally enforceable under the ESIGN Act (15 U.S.C. ch. 96, 2000) and UETA where adopted. Ensure intent, consent, attribution, and reproducible records to meet the four-part ESIGN validity test.
Do I need a notary or witness?
Most IPS documents do not require notarization or witnesses. Check institutional charters, trust instruments, or state law if the IPS is annexed to a notarized instrument or if a state-specific formalization is required.
How often should the IPS be updated?
Review the IPS at least annually and update within 30 days of material changes to objectives, liabilities, or regulatory requirements. Document revisions and approval dates to preserve an audit trail.
What records should be retained?
Retain signed IPS versions, meeting minutes, performance reports, and manager diligence records. Follow applicable retention periods such as IRS three-year standards and HIPAA six-year rules where health data applies.
How to ensure secure eSigning processes?
Use platforms with TLS 1.2/1.3, AES-256 encryption, detailed audit trails, and appropriate compliance certifications. For protected health information, execute a BAA prior to using the vendor.

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