It's not sexy. You won't brag about it at cocktail parties. Yet, the Investment Policy Statement (IPS) is arguably the most consequential element of any portfolio. The Investment Management Council even goes so far to say, "This step (creating the IPS) is one of the most important functions performed in the development and supervision of an investment program. Qualified plans under ERISA are not specifically required to have an IPS. The Department of Labor (DOL), however, believes that such statements serve a legitimate purpose in many plans by helping assure that investments are made in a prudent and rational manner.


The Investment Policy Statement is the all encompassing document that outlines how the portfolio will be invested or, in the case of participant directed retirement plans, how the investment options will be selected.


At R-Tech, we construct an IPS that will combine elements of planning and philosophy that covers the steps in the management process. For example, we may start with information about the organization and its portfolio(s), work through asset and style allocation, manager selection and finish with performance monitoring.


As one can imagine, creating an IPS is an immense task and requires a sound understanding of the capital markets and fiduciary issues. The reality, though, is that properly creating and following an IPS is probably the only way to attain a portfolio's goals - whatever those goals may be.


At R-Tech, one of our strengths is creating the Investment Policy Statement and reviewing it as portfolios mature. We have the tools and experience to develop a sound IPS that will be tested through time. The IPS is extremely important and, in many cases, required document. We understand this and have the capacity to devote the resources necessary to create an IPS individualized for each client and every situation, if requested. The personalized design of an IPS is another R-Tech value added benefit.