Is an electronic IPS legally binding?

Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and reliable record retention are demonstrable.

Do fiduciaries need a written IPS?

While not always legally required, a written IPS documents fiduciary processes and can reduce liability by showing a consistent, documented approach to investment decisions.

How often should the IPS be updated?

Review at least annually and update after material changes in objectives, funding, liabilities, or regulatory requirements; document each revision and approval date.

Who can sign on behalf of the entity?

Authorized signers should be explicitly named in the IPS. Typical signers are the CIO, committee chair, or an officer designated by corporate or plan governance documents.

Is notarization required for an IPS?

Not generally. Notarization is rarely required for IPS documents, though specific institutional policies or counterparties may request notarization for added authentication.

How should signed IPS documents be stored?

Store tamper-evident signed copies and the audit trail in a secure document repository with backup and access controls; retain per the published retention schedule.

Electronic Signature
Templates
Insurance
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!

What an Investment Policy Statement Is and Why It Matters

An Investment Policy Statement (IPS) is a written document that defines an investor’s objectives, constraints, risk tolerance, target asset allocation, governance rules, and monitoring procedures. Institutional boards, retirement plans, endowments, foundations, and individual investors use an IPS to align investment decisions with long‑term goals, document fiduciary duties, and provide a consistent framework for manager selection, rebalancing, and performance measurement across market cycles.

Primary Benefits of a Clear Investment Policy Statement

A concise IPS reduces discretionary drift, clarifies responsibilities, and documents a defensible strategy for fiduciaries and auditors. It supports consistent decision making, communicates expectations to advisors and custodians, and creates objective criteria for monitoring and reporting performance.

Typical Users and Stakeholders

The IPS is used by committees and professionals who oversee pooled or discretionary assets and by individuals who want formal governance around investing.

Board and Investment Committee members who set objectives and approve investment managers and policies.
Chief Investment Officers and portfolio managers who implement strategy and monitor compliance with targets.
Registered investment advisors and consultants who recommend allocations, select managers, and report performance.

Core Sections to Include in a Professional IPS

A professional IPS is structured, measurable, and actionable; include governance, objectives, allocation, constraints, implementation, and monitoring provisions.

Statement of Purpose

Describe the document’s scope and whom it governs, including plan type, beneficiaries, and decision authority; clarify whether it applies to all assets or specific accounts.

Investment Objectives

Set return goals and real‑return expectations (net of fees), time horizon, and whether the objective is income, growth, or capital preservation.

Risk Tolerance

Define acceptable downside, volatility targets, stress‑testing parameters, and quantitative measures used to assess risk tolerance.

Asset Allocation

Provide strategic allocation targets, allowable ranges, rebalancing bands, and permissible asset classes including private vs. public allocations.

Governance

Document roles, committee composition, voting rules, meeting cadence, manager selection criteria, and escalation for conflicts of interest.

Monitoring and Reporting

Specify performance benchmarks, reporting frequency, attribution methodology, and procedures for periodic IPS review and amendments.

Essential Information to Capture

Entity Name: Legal name of plan or investor

Effective Date: MM/DD/YYYY

Investment Objectives: Return and income targets

Risk Profile: Volatility and drawdown limits

Allocation Targets: Strategic targets and ranges

Signatories: Authorized signers and titles

Step‑by‑Step: Creating or Updating an IPS

Follow a structured process to gather inputs, draft the IPS, obtain approvals, and establish monitoring.

01

Gather inputs: Collect financial goals, liabilities, time horizon, and legal constraints.
02

Draft policy: Write objectives, allocation, governance, and monitoring provisions.
03

Review and approve: Committee reviews, votes, and documents approval date.
04

Implement and monitor: Assign responsibilities and schedule regular reporting.

How to Customize and Complete the IPS Online

Map the IPS sections to online fields and automate approvals to reduce manual errors and create an audit trail.

Field	Configuration
Effective Date	MM/DD/YYYY field with calendar picker
Allocation Table	Repeating rows for asset class and percentage
Signers	Role-based signer list with email addresses
Approval Workflow	Sequential or parallel routing with reminders

Where to Send and File the Final IPS

Define primary custodial and governance destinations for the signed IPS and any supporting exhibits.

Custodian: Upload to custodian portal for account records.
Advisor: Store a signed copy with the advisory firm.
Committee Archive: Retain a board‑approved copy in governance files.
Legal Counsel: Provide final copy for compliance review if required.

Digital Signing and Distribution Considerations

Use a platform that supports secure eSignature workflows, audit trails, and role-based authentication.

File formats: PDF and DOCX support
Integrations: CRM, custodian, and cloud storage
Authentication: Email, SMS, or advanced options

Common Review and Reporting Timelines

Establish fixed dates for IPS adoption, periodic review, and reporting to ensure continuous compliance and oversight.

Adoption Date:

Documented date of committee approval

Annual Review:

Full policy review at least once per year

Quarterly Monitoring:

Portfolio and allocation reports every quarter

Rebalancing Trigger:

Rebalance when allocations breach stated bands

Ad hoc Updates:

Update after material goal or regulatory changes

Common Mistakes to Avoid When Preparing an IPS

Using vague return objectives that cannot be measured or compared to benchmarks.
Failing to define roles and signatory authority, leaving ambiguous approval paths during market stress.
Omitting explicit rebalancing bands or threshold triggers, which leads to unmanaged drift and concentration risk.
Not documenting conflicts of interest or fees, which increases fiduciary and compliance exposure.

Key Risks and Consequences of an Inadequate IPS

Fiduciary Breach: Litigation or regulatory scrutiny

Poor Outcomes: Missed objectives or undue risk

Tax Exposure: Unplanned tax consequences

Contractual Risk: Manager disputes over mandates

Regulatory Fines: Industry‑specific penalties

Reputational Harm: Loss of stakeholder trust

Who Has Authority to Sign the IPS

Chief Investment Officer

The CIO typically signs to accept operational responsibility for implementing the IPS, documenting delegation to portfolio managers and external advisors in the event of delegated authority.

Board Chair

The board chair or committee chair commonly provides final approval and signature to confirm governance acceptance and to record the committee vote and effective date.

Illustrative Use Cases

Two common scenarios show how an IPS is applied and maintained in practice across different institutional settings.

Endowment Committee

A university committee adopts an IPS to codify spending policy and risk limits, then assigns quarterly monitoring to the investment office.

Committee uses a target allocation with 60/40 public/private mix.
The IPS guides manager searches, documents fiduciary duty, and provides a defensible basis for annual performance reviews and any tactical shifts.

Registered Investment Advisor

An RIA prepares IPS templates for discretionary client accounts, customizing objectives and constraints per client goals.

Templates include rebalancing bands and permissible securities lists.
Signed IPS documents are kept in the client file and used to demonstrate suitability and compliance during periodic audits and client reviews.

Frequently Asked Questions About Investment Policy Statements

Answers to common operational and legal questions regarding IPS drafting, signature authority, updates, and electronic execution.

Need help? Contact support

Is an electronic IPS legally binding?
Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided intent, consent, attribution, and reliable record retention are demonstrable.
Do fiduciaries need a written IPS?
While not always legally required, a written IPS documents fiduciary processes and can reduce liability by showing a consistent, documented approach to investment decisions.
How often should the IPS be updated?
Review at least annually and update after material changes in objectives, funding, liabilities, or regulatory requirements; document each revision and approval date.
Who can sign on behalf of the entity?
Authorized signers should be explicitly named in the IPS. Typical signers are the CIO, committee chair, or an officer designated by corporate or plan governance documents.
Is notarization required for an IPS?
Not generally. Notarization is rarely required for IPS documents, though specific institutional policies or counterparties may request notarization for added authentication.
How should signed IPS documents be stored?
Store tamper-evident signed copies and the audit trail in a secure document repository with backup and access controls; retain per the published retention schedule.

Comparing eSignature Vendors for IPS Execution

Select an eSignature provider that meets security, audit, and authentication needs; the table summarizes common plan features and vendor pricing.

	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 by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

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