Q&A: Why an Investment Policy Statement matters

An Investment Policy Statement, or IPS, may sound technical, but at its heart it is a practical document. It helps turn long-term intentions into clear day-to-day investment decisions.

Donna Brehaut, Client Director and member of Saffery Trust’s Investment Review Committee, explains why a well-crafted IPS can bring clarity for clients and support strong governance for trustees.

What is an Investment Policy Statement and why does it matter?

An IPS is a framework for decision-making. It sets out the purpose of a client’s portfolio of assets and investments, what’s designed to achieve, and the principles that should guide how it is managed over time.

In simple terms, it helps connect intent with action.

For clients, it creates clarity around their goals and priorities. For trustees, investment managers and advisors, it provides a shared understanding of how those goals should be reflected in the investment approach. That shared understanding is important. It helps everyone involved work from the same page and make decisions that remain aligned to the client’s broader objectives.

At Saffery Trust, we believe every wealth structure with investments should have an IPS in place. It provides direction, supports informed decision-making and helps ensure investment activity remains aligned with the client’s long-term objectives and risk profile.

How is an IPS prepared?

An IPS should be developed collaboratively. The best outcomes usually come from open discussion between the client, the trustee, the investment manager and, where appropriate, other advisors.

Our role is to listen carefully, ask the right questions and help shape a document that reflects not only the financial picture, but also the client’s values, priorities and longer-term vision. An IPS is not just about markets and performance, it is also to understand the client’s goals when it comes to their wealth.

Putting an IPS in place early is helpful. It gives all parties a clear framework from the outset and helps establish how investment decisions should be approached, as well as how existing investments should be managed.

That said, an IPS should never be seen as fixed – it is a living document. Markets change, family circumstances evolve and priorities can shift over time. Regular review is therefore essential to make sure the document remains relevant and fit for purpose.

What should an IPS include?

A good IPS should clearly set out the objectives of the investment portfolio. That may include capital growth, income generation, wealth preservation, or a combination of these.

It should also cover practical considerations such as:

• risk tolerance
• investment time horizon
• liquidity needs
• acceptable levels of volatility
• investment restrictions
• target asset allocation
• appropriate benchmarks or peer groups for measuring performance

Just as importantly, the IPS should consider how the investment portfolio fits within the client’s wider wealth structure and longer-term plans.

This context matters. A portfolio that represents a relatively small part of a client’s overall wealth may allow for a different level of investment risk than one which represents a significant proportion of total wealth. That wider picture can influence everything from risk appetite to diversification and asset allocation.

What are the main benefits of having an IPS?

One of the biggest advantages of an IPS is clarity.

When it is well drafted, it gives everyone involved a clear reference point. That is particularly valuable if there is a change in advisor, trustee personnel or investment manager. Someone new to the structure should be able to read the IPS and quickly understand the purpose of the portfolio, the agreed strategy and how it relates to the needs of the beneficiaries.

An IPS can also be especially useful where a structure includes multiple asset classes or several investment managers. In those situations, it helps bring everything together into one coherent framework.

It also supports better communication. Rather than reacting to short-term events in isolation, all parties can refer back to an agreed strategy and assess decisions in the context of the client’s broader goals. That helps make the overall approach more considered, more consistent and ultimately more aligned to what the client wants to achieve.

What do you enjoy most about helping clients create an IPS?

For me, one of the most rewarding parts of the process is getting to know the individuals and families we support.

Creating an IPS means taking the time to understand what our clients want their wealth to achieve, what matters most to them and what they are planning for over the long term. Those conversations go far beyond investment performance.

It is about listening, building trust and understanding the bigger picture. When we can help translate a client’s goals and values into a clear, tailored investment framework, it feels like a genuine partnership. We are not simply overseeing assets. We are helping support outcomes that matter to the people behind them.

If you would like to find out more about how we support clients with investment governance and wealth structuring, please get in touch.