# Investment Policy Statement: [Client or household name]

> Investment policy statement (IPS) for a private client, a couple or a
> family: the written agreement between the client and the adviser or
> portfolio manager on goals, return requirement, risk, constraints,
> strategic asset allocation, implementation, rebalancing, monitoring,
> fees and responsibilities. An individual IPS is a professional practice
> document rather than a legal requirement in most jurisdictions; it
> supports the suitability record under MiFID II Article 25(2) and
> Commission Delegated Regulation (EU) 2017/565 Article 54, the care
> obligation of SEC Regulation Best Interest (17 CFR 240.15l-1) and the
> investment adviser duty of care described in SEC Release IA-5248.
> Replace every `[bracketed]` value and every row marked *Example*.
> Projections are illustrative and not guaranteed. This is a document
> format, not financial, investment, tax or legal advice. Obtain the
> regulation or rule for the normative text.

<!--
Guidance: How to use this template
- Write the IPS after the Client Risk Profile (`finance/client-risk-profile`)
  is complete and confirmed. The IPS uses the profile; it does not
  re-collect the facts.
- Keep it short enough for the client to read and sign, and specific
  enough that a new adviser could run the portfolio from it alone.
- The IPS is the policy. Individual recommendations and their reasons
  belong in the MiFID Suitability Report (`compliance/mifid-suitability-report`)
  or the equivalent record in your jurisdiction. Results against the IPS
  are reported in the Client Portfolio Review (`finance/client-portfolio-review`).
- For a pension fund, endowment, foundation or insurer use the
  institutional version (`finance/investment-policy-statement-institutional`).
  For a household planning its own finances without an adviser, start
  with the Financial Plan (`personal/financial-plan`) and the Retirement
  Plan (`personal/retirement-plan`).
- Every number in the worked example is fictional and recomputed in the
  text. Replace the capital market assumptions with the firm's current,
  documented assumptions.
-->

## Document control

<!-- Guidance: Identify the client, the accounts covered and the governing agreement. A change to the allocation, ranges, benchmark or fees is a new version signed by the client. -->

| Field | Value |
|---|---|
| Document ID | [IPS-YYYY-NNN] |
| Version | [1.0] |
| Status | [Draft / Signed / Superseded] |
| Owner | [@adviser] |
| Approvers/reviewers | [@investment-committee], [@compliance-reviewer] |
| Last updated | YYYY-MM-DD |
| Classification | Confidential: client personal data |
| Client(s) | [Names] |
| Accounts covered | [Account numbers and custodians] |
| Service type | [Discretionary management / Advisory / Self-directed with adviser review] |
| Base currency | [EUR / USD / other] |
| Client risk profile reference | [CRP-YYYY-NNN, version] |
| Governing agreement | [Agreement ID and date] |
| Next scheduled review | YYYY-MM-DD |

### Approvals

| Role | Name | Decision | Date |
|---|---|---|---|
| Adviser or portfolio manager | [Name] | [Proposed] | YYYY-MM-DD |
| Investment committee or supervisor | [Name] | [Approved] | YYYY-MM-DD |
| Client (each account holder) | [Name] | [Agreed and signed] | YYYY-MM-DD |

### Revision history

| Version | Date | Author | Change |
|---|---|---|---|
| 0.1 | YYYY-MM-DD | [@adviser] | Draft for discussion |
| 1.0 | YYYY-MM-DD | [@adviser] | Signed by the clients |
| [1.1] | YYYY-MM-DD | [@adviser] | [Annual review: describe changes] |

## Contents

1. [Purpose and scope](#1-purpose-and-scope)
2. [Client profile summary](#2-client-profile-summary)
3. [Goals and return requirement](#3-goals-and-return-requirement)
4. [Risk objectives](#4-risk-objectives)
5. [Constraints](#5-constraints)
6. [Strategic asset allocation and ranges](#6-strategic-asset-allocation-and-ranges)
7. [Implementation](#7-implementation)
8. [Rebalancing and cash management](#8-rebalancing-and-cash-management)
9. [Monitoring, reporting and review](#9-monitoring-reporting-and-review)
10. [Roles, fees and conflicts](#10-roles-fees-and-conflicts)
11. [Acknowledgement and signatures](#11-acknowledgement-and-signatures)
12. [Glossary and references](#12-glossary-and-references)
13. [Standard and licence note](#standard-and-licence-note)

## 1. Purpose and scope

<!-- Guidance: Say what the IPS governs and what it does not. Name every account in scope and the assets outside it that still matter, such as pensions or a business. Pitfall: an IPS that silently ignores assets held elsewhere, so the real household allocation is unknown. -->

This statement sets out how the assets listed below will be invested
and supervised. It records the client's goals, the return needed to
reach them, the risk the client is willing and able to take, the
constraints that apply, the long-term asset allocation and the rules
for implementation, rebalancing, monitoring and review. It is a
standing policy: individual transactions follow it, and any departure
needs a documented exception or a new version.

| Item | In scope | Outside scope but considered |
|---|---|---|
| Managed or advised accounts | [Account list] | |
| Pension and retirement accounts | [In scope / Outside] | [Detail] |
| Concentrated or restricted holdings | [In scope / Outside] | [Detail] |
| Property and business interests | | [Detail] |
| Emergency reserve | | [Amount and where held] |

*Example*: the IPS covers the joint discretionary account of Mara and
Theo Lind at Kestrel Bay Capital Europe (fictional), EUR 200,000
at inception, split into a retirement sleeve (EUR 160,000) and an
education sleeve (EUR 40,000), with monthly contributions of EUR 1,500.
Outside scope but considered: employer pension plans (EUR 185,000),
employer shares held by Theo (EUR 40,000), emergency reserve
(EUR 38,000) and the family home.

## 2. Client profile summary

<!-- Guidance: Summarise the confirmed risk profile in a few lines with a reference to the full document. Do not duplicate the fact-find. Pitfall: an IPS that states a different risk band from the profile. -->

| Item | Summary | Source |
|---|---|---|
| Household | [Ages, dependants, employment] | [CRP section 1] |
| Net worth and liquidity | [Amounts] | [CRP section 2] |
| Risk tolerance (willingness) | [Band] | [CRP section 5.1] |
| Capacity for loss (ability) | [Amount or band] | [CRP section 5.2] |
| Resulting profile | [Band per sleeve] | [CRP section 9] |
| Knowledge and experience outcome | [Eligible product families] | [CRP section 4] |
| Sustainability preferences | [Choices] | [CRP section 6] |

*Example*: two working adults aged 46 and 44 with two children; net
worth EUR 673,000; tolerance bands Growth and Balanced, with the lower
band applied; capacity for loss EUR 50,000; profile Balanced for the
retirement sleeve and Cautious for the education sleeve; eligible
products are funds, ETFs and listed shares; at least 20% sustainable
investments and consideration of greenhouse gas emissions and
controversial weapons.

Copy the outcomes, not the questions. If the profile changes after the
IPS is signed, for example because a holder changes job or the
household receives an inheritance, the IPS must be checked against the
new profile before the next portfolio decision, and a new version is
signed if any band, goal or constraint changes. Where the two holders
of a joint account have different tolerance bands, say which band
applies and why, so that both understand the trade-off they accepted.

## 3. Goals and return requirement

<!-- Guidance: Turn each goal into an amount, a date and a required annual return after costs. Compare the required return with the expected return of the proposed allocation. If the required return is higher than the expected return, change the goal, the savings or the timing, not the risk profile. Pitfall: choosing a riskier allocation to close a funding gap that the client cannot afford to lose. -->

### 3.1 Goals

| ID | Goal | Target (nominal) | Year needed | Priority | Sleeve |
|---|---|---|---|---|---|
| OBJ-001 *(Example)* | Retirement capital to supplement pensions | 590,000 | 2042 (16 years) | Essential | Retirement |
| OBJ-002 *(Example)* | University costs for two children | 66,000 | 2032 (6 years) | Important | Education |
| OBJ-003 *(Example)* | Help with children's first home | Not fixed | After 2040 | Aspirational | Surplus of retirement sleeve |

### 3.2 Required return

The required return is the annual rate, after all costs, at which the
current value plus planned contributions reaches the target by the
target date. With contributions made at the end of each year:

$$
FV = PV\,(1+r)^{n} + C\,\frac{(1+r)^{n}-1}{r}
$$

where $PV$ is the value today, $C$ the annual contribution, $n$ the
number of years and $FV$ the target. Solve for $r$ numerically (a
spreadsheet goal-seek or rate function). The real required return
removes expected inflation $\pi$:

$$
r_{\text{real}} = \frac{1+r}{1+\pi} - 1
$$

| Sleeve | PV | Annual contribution | Years | Target | Required return (nominal, after costs) |
|---|---|---|---|---|---|
| Retirement *(Example)* | 160,000 | 14,400 | 16 | 590,000 | 3.66% |
| Education *(Example)* | 40,000 | 3,600 | 6 | 66,000 | 1.45% |

*Example*: with inflation assumed at 2.0%, the real required return of
the retirement sleeve is (1.0366 / 1.020) minus 1, or about 1.63% a
year.

### 3.3 Expected return of the proposed allocation

Use the firm's capital market assumptions (CMA), stated with their date
and source. The expected return of a sleeve is the weighted average of
the asset class assumptions; subtract the total cost estimate to get
the expected return after costs.

$$
E[R_p] = \sum_{i} w_i\,E[R_i] \qquad E[R_p]_{\text{net}} = E[R_p] - c
$$

| Asset class | CMA return *(Example)* | Retirement weight | Education weight |
|---|---|---|---|
| Global equity | 6.5% | 50% | 25% |
| Global investment-grade bonds | 3.5% | 35% | 0% |
| Short-duration bonds | 3.0% | 0% | 60% |
| Inflation-linked bonds | 3.2% | 5% | 0% |
| Listed real estate | 5.5% | 5% | 0% |
| Cash | 2.5% | 5% | 15% |
| **Expected return before costs** | | **5.04%** | **3.80%** |
| Total cost estimate (section 10) | | 1.10% | 1.10% |
| **Expected return after costs** | | **3.94%** | **2.70%** |
| Required return (section 3.2) | | 3.66% | 1.45% |
| Margin | | 0.28 pp | 1.25 pp |

*Example* check: retirement sleeve 0.50 x 6.5 + 0.35 x 3.5 + 0.05 x 3.2
+ 0.05 x 5.5 + 0.05 x 2.5 = 5.035%, shown as 5.04%; education sleeve
0.25 x 6.5 + 0.60 x 3.0 + 0.15 x 2.5 = 3.80%. At 3.94% after costs the
retirement sleeve projects to about EUR 609,700 in 16 years; at 2.70%
the education sleeve projects to about EUR 70,000 in 6 years. The
retirement margin is small, so the IPS records the agreed response in
section 9: if the projected value falls below the target at a review,
the clients will first raise contributions, then move the target date,
before any change of risk band is considered.

## 4. Risk objectives

<!-- Guidance: Express risk in terms the client understands: a loss amount, a range of outcomes and a recovery time, in addition to volatility. Tie each limit to the capacity for loss. Pitfall: stating only a volatility number that the client cannot relate to. -->

| Measure | Retirement sleeve | Education sleeve | Basis |
|---|---|---|---|
| Risk profile band | *Example*: 3 Balanced | *Example*: 2 Cautious | Client risk profile |
| Illustrative stress loss of the model | *Example*: 20% (EUR 32,000) | *Example*: 12% (EUR 4,800) | Firm stress scenarios |
| Combined stress loss | *Example*: EUR 36,800 | | Sum of the two sleeves |
| Capacity for loss of the mandate | *Example*: EUR 50,000 | | Client risk profile section 5.2 |
| Expected annual volatility range | [Range from CMA] | [Range] | Firm models |
| Loss alert to client | Fall of 10% from the start of a reporting period, then each further 10% | Same | Delegated Regulation 2017/565 Article 62(1) for portfolio management |

Explain in writing that markets can fall further than any stress
scenario and that a balanced portfolio can take several years to
recover after a large fall. The client should not expect the IPS limits
to cap losses; they are design and monitoring limits.

Present each risk measure as an amount of money on the actual portfolio
as well as a percentage. Most clients relate better to "in a scenario
like a severe market fall, the retirement sleeve could lose about EUR
32,000" than to a volatility figure. Show also a range of outcomes over
the goal horizon, for example a weak, a central and a strong path from
the firm's projection tool, and say how long a recovery has taken in
past falls of a similar size. Check that the combined stress loss of
all sleeves stays inside the capacity for loss in the risk profile; if
it does not, the allocation is wrong, not the capacity.

## 5. Constraints

<!-- Guidance: Cover time horizon, liquidity, taxes, legal and regulatory factors, and unique circumstances. Each constraint should change something in the allocation or the implementation; say what. Pitfall: listing constraints without their effect. -->

| ID | Type | Constraint | Effect on the portfolio |
|---|---|---|---|
| CON-001 *(Example)* | Time horizon | Retirement sleeve 16 years to first withdrawal, then 25 or more years of drawdown | Long horizon supports growth assets within the Balanced band |
| CON-002 *(Example)* | Liquidity | Education withdrawals of about EUR 11,000 a year from 2032 | Education sleeve in short-duration bonds and cash; glide path in section 6.3 |
| CON-003 *(Example)* | Taxes | Gains taxed on realisation; contributions to [tax-advantaged account] allowed up to [limit] | Use tax-advantaged accounts first; realise gains within annual allowances; [tax adviser] confirms |
| CON-004 *(Example)* | Legal and regulatory | Theo is an insider for employer shares | No trading in employer shares inside the mandate; outside holdings sold only in open windows |
| CON-005 *(Example)* | Unique: concentration | EUR 40,000 employer shares outside the mandate | Mandate excludes that issuer and underweights its sector |
| CON-006 *(Example)* | Unique: sustainability | At least 20% sustainable investments; PAI on emissions and controversial weapons | Use qualifying fund variants; report the share each year |
| [CON-NNN] | [Type] | [Detail] | [Effect] |

Write each constraint so that a reviewer can test whether the
portfolio respects it. "The client is cautious about the employer's
shares" cannot be tested; "the mandate holds no shares of the employer
and its sector weight is at most the benchmark weight" can. Review the
tax constraints with the client's tax adviser at least once a year,
because allowances and account limits change, and record who confirmed
them.

### 5.1 Local equivalents of tax-advantaged accounts

Names only, as of 2026-10, examples not exhaustive. Contribution limits,
tax treatment and eligibility change often; check local rules.

| Country | Retirement accounts | Other tax-advantaged savings | Education savings |
|---|---|---|---|
| United States | 401(k), IRA, Roth IRA | Health savings account (HSA) | 529 plan |
| United Kingdom | Workplace pension, SIPP | ISA, Lifetime ISA | Junior ISA |
| Canada | RRSP | TFSA | RESP |
| Australia | Superannuation | | |
| Germany | Betriebliche Altersversorgung, Riester, Rürup | | |
| France | PER | Assurance-vie, PEA | |
| Japan | iDeCo | NISA | |
| [Country] | [Name] | [Name] | [Name] |

## 6. Strategic asset allocation and ranges

<!-- Guidance: Give target weights, permitted ranges and a benchmark for each asset class and sleeve. The weights must add to 100%. Name benchmarks generically or by the index the firm licenses. Pitfall: ranges so wide that any portfolio complies. -->

### 6.1 Targets and ranges

| Asset class | Retirement target | Range | Education target | Range | Combined target | Benchmark component |
|---|---|---|---|---|---|---|
| Global equity | 50% | 45 to 55% | 25% | 20 to 30% | 45% | [Global equity index, net return] |
| Global investment-grade bonds | 35% | 30 to 40% | 0% | 0 to 5% | 28% | [Global aggregate bond index, hedged to base currency] |
| Short-duration bonds | 0% | 0 to 5% | 60% | 55 to 65% | 12% | [1 to 3 year government and corporate index] |
| Inflation-linked bonds | 5% | 0 to 10% | 0% | 0 to 5% | 4% | [Inflation-linked bond index] |
| Listed real estate | 5% | 0 to 8% | 0% | 0% | 4% | [Global listed real estate index] |
| Cash | 5% | 2 to 10% | 15% | 10 to 20% | 7% | [Overnight rate in base currency] |
| **Total** | **100%** | | **100%** | | **100%** | |

*Example* check of the combined column: the retirement sleeve is 80%
of the mandate and the education sleeve 20%, so global equity is
0.8 x 50% + 0.2 x 25% = 45%; investment-grade bonds 0.8 x 35% = 28%;
short-duration bonds 0.2 x 60% = 12%; inflation-linked 4%; real estate
4%; cash 0.8 x 5% + 0.2 x 15% = 7%; total 100%.

Set ranges wide enough that normal market moves do not force frequent
trading, and narrow enough that the sleeve cannot drift into a
different risk band. A practical test is that a sleeve at the edge of
every range at once should still sit inside the growth-asset range of
its model in the risk profile. In the example the retirement sleeve
holds 55% growth assets (equity and listed real estate) at target,
inside the 40% to 60% range of the Balanced model, and the education
sleeve holds 25%, inside the 20% to 40% range of the Cautious model.

### 6.2 Currency, concentration and other limits

| Limit | Value |
|---|---|
| Unhedged foreign currency exposure | [Maximum % of sleeve] |
| Single issuer (excluding government bonds and diversified funds) | [Maximum %] |
| Single fund | [Maximum %] |
| Excluded issuers and sectors | [List, including employer per CON-004] |
| Leverage and derivatives | None, except currency hedging inside funds |
| Illiquid or private assets | None (not eligible per knowledge assessment) |

### 6.3 Glide path

Reduce risk in a sleeve as its goal date approaches. Record the steps
in advance so that changes are rules, not reactions.

| Sleeve | Date | Equity target | Defensive target |
|---|---|---|---|
| Education *(Example)* | Inception to 2029 | 25% | 75% |
| Education *(Example)* | 2030 to 2031 | 15% | 85% |
| Education *(Example)* | From 2032 (withdrawals) | 0 to 10% | 90 to 100% |
| Retirement | [Date] | [%] | [%] |

## 7. Implementation

<!-- Guidance: Describe how the allocation is built: vehicles, selection criteria, account location, sustainability filter and trading rules. Pitfall: an IPS that names asset classes but no criteria for choosing the funds that implement them. -->

| Topic | Policy |
|---|---|
| Vehicles | [Index funds and ETFs as core; active funds where the selection criteria are met; individual shares within limits] |
| Selection criteria | Total cost, tracking difference or after-cost performance over [period], size and liquidity, domicile and tax efficiency, sustainability classification, operational quality of the manager |
| Account location | [Hold the least tax-efficient assets in tax-advantaged accounts first] |
| Sustainability | Product sustainability data checked at selection and annually; share of sustainable investments reported |
| Trading | Best execution under the firm policy; no market timing outside the rebalancing rules |
| Conflicts | In-house products only where they meet the same criteria as external ones (section 10) |
| Transfers in | [In kind where possible to avoid realising gains] |

### 7.1 Initial portfolio and transition

| Step | Action | Date | Notes |
|---|---|---|---|
| T-001 *(Example)* | Transfer four ETFs already in the model universe in kind (EUR 92,000) | YYYY-MM-DD | Avoids realising gains on those holdings |
| T-002 *(Example)* | Sell three active funds that cannot be transferred or do not fit the IPS (EUR 108,000) and reinvest | YYYY-MM-DD | After the transfer completes; within the annual gain allowance where possible |
| T-003 *(Example)* | Invest to targets (EUR 160,000 retirement, EUR 40,000 education); start monthly contributions | YYYY-MM-DD | EUR 1,200 retirement, EUR 300 education |

## 8. Rebalancing and cash management

<!-- Guidance: Define when and how the portfolio returns to target: a calendar check, a threshold rule or both, plus how contributions and withdrawals are used. Pitfall: no rule at all, so rebalancing happens only when the adviser has time or the client is nervous. -->

```mermaid
flowchart TD
    A[Monthly contribution or quarterly check] --> B{Any asset class outside its range?}
    B -- No --> C[Invest contributions towards the most underweight class]
    B -- Yes --> D{Can contributions or withdrawals fix it within one quarter?}
    D -- Yes --> C
    D -- No --> E[Rebalance to target, considering costs and taxes]
    E --> F[Record trades and reason in the review file]
    C --> F
```

| Rule | Value |
|---|---|
| Calendar check | Quarterly, and at each annual review |
| Threshold trigger | Any asset class outside its range in section 6.1 |
| Rebalance to | [Target / Edge of range] |
| Use of cash flows | Contributions buy underweights; withdrawals sell overweights |
| Minimum trade size | [Amount] to avoid uneconomic trades |
| Tax awareness | Prefer rebalancing with cash flows or in tax-advantaged accounts |
| Cash buffer in the mandate | [Target cash per section 6.1] |

## 9. Monitoring, reporting and review

<!-- Guidance: State what the client receives, how often, and the events that trigger an IPS review. Include the agreed response to a funding shortfall. Pitfall: reporting only performance, without progress towards goals. -->

| Item | Frequency | Content |
|---|---|---|
| Periodic statement | Quarterly (portfolio management) | Holdings and values, transactions, performance versus benchmark, fees; see the Client Portfolio Review |
| Ex-post costs and charges | Annual | Total costs in amount and percentage, cumulative effect on return |
| Goal progress | Annual | Projected value per goal versus target |
| Suitability review | At least annual | Profile refresh, IPS confirmation or update |
| Loss alert | When triggered | 10% fall from the value at the start of the reporting period, and each further 10% |

### 9.1 Review triggers

- Change in the client's circumstances recorded in the risk profile
  (income, family, health, inheritance, residence).
- A goal moves, is achieved or is added.
- Projected value of an essential goal below target at a review.
- Asset class outside its range for more than one quarter.
- Change in capital market assumptions large enough to change the
  expected return by [threshold].
- Change of law or tax rules affecting the accounts.

### 9.2 Agreed responses

Agree the responses before they are needed. When a market fall or a
missed contribution puts a goal behind schedule, an agreed sequence of
actions protects the client from changing the risk band at the worst
moment, and protects the adviser from pressure to recommend more risk
to close a gap the client cannot afford to lose.

| Situation | Agreed response |
|---|---|
| Projection below target for an essential goal *(Example)* | First raise contributions, then move the target date, then reduce the target; change the risk band only after a new risk profile |
| Projection well above target *(Example)* | Consider reducing risk to lock in the goal |
| Large market fall *(Example)* | Follow the rebalancing rules; do not change the allocation without a review meeting |

### 9.3 Completing and reviewing this IPS

Complete the sections in order and do not start section 6 until the
required return in section 3 has been compared with the expected return
of the proposed allocation. A supervisor reviewing the draft should
recompute at least the required return, the expected return after
costs, the combined weights and the combined stress loss, and should
confirm that every constraint has a stated effect on the portfolio.

Common errors are: a risk band in the IPS that differs from the
confirmed profile; goals without a date or an amount; capital market
assumptions without a source or date; ranges that overlap a different
risk band; costs shown as an adviser fee only; assets outside the
mandate ignored, so a concentration is missed; and an IPS that is
signed once and never reviewed. Each of these weakens the suitability
record that the IPS is meant to support.

## 10. Roles, fees and conflicts

<!-- Guidance: Name who does what and how everyone is paid. Show fees as percentages and amounts. Disclose conflicts such as in-house products or third-party payments. Pitfall: listing the adviser fee but not fund and transaction costs. -->

| Party | Responsibilities |
|---|---|
| Client | Provide accurate information; tell the adviser about changes; approve this IPS and its updates |
| Adviser or portfolio manager | Implement and monitor the IPS; report; recommend changes; keep records |
| Custodian | Hold assets; send account statements |
| Tax adviser | Advise on tax constraints and account use |
| Compliance function | Review the IPS and suitability records |

| Cost item | Rate *(Example)* | Annual amount on EUR 200,000 *(Example)* |
|---|---|---|
| Management or advisory fee | 0.80% | 1,600 |
| Custody and platform | 0.05% | 100 |
| Transaction costs (service) | 0.04% | 80 |
| Fund ongoing charges | 0.16% | 320 |
| Fund transaction costs | 0.05% | 100 |
| **Total estimate** | **1.10%** | **2,200** |

Give the client the total cost in money as well as in percent, and
show the effect of costs over the goal horizon. In the example, costs
of 1.10% a year reduce the expected return of the retirement sleeve
from 5.04% to 3.94%; over 16 years that difference is larger than the
whole margin between the expected and the required return, so cost
control is part of meeting the goal, not an afterthought. Compare the
ex-ante estimate here with the annual ex-post statement in the Client
Portfolio Review and explain any difference to the client.

Third-party payments: [None / describe and quantify]. Conflicts of
interest: [In-house funds, remuneration linked to products, describe
how they are managed], with reference to the firm's Conflicts of
Interest Register (`compliance/conflicts-of-interest-register`).

## 11. Acknowledgement and signatures

<!-- Guidance: Each holder signs. State that the IPS is not a guarantee and that projections depend on assumptions. Pitfall: an unsigned IPS that cannot show what was agreed. -->

The client(s) and the adviser agree that this statement reflects the
client's goals, risk profile and constraints as understood on the date
below. The client(s) understand that investment values can fall as well
as rise, that projections are illustrative and based on stated
assumptions, and that past performance does not predict future
results. The adviser will manage or advise on the accounts in line with
this statement and will propose an update when a review trigger occurs.

| Party | Name | Signature | Date |
|---|---|---|---|
| Client | [Name] | [Signature] | YYYY-MM-DD |
| Client | [Name] | [Signature] | YYYY-MM-DD |
| Adviser or portfolio manager | [Name] | [Signature] | YYYY-MM-DD |

## 12. Glossary and references

<!-- Guidance: Define terms in plain language and list the rules and assumptions used. Pitfall: undated capital market assumptions. -->

### Glossary

| Term | Meaning |
|---|---|
| Strategic asset allocation | Long-term target weights for each asset class |
| Range | The band within which an asset class may move before rebalancing |
| Required return | The annual return after costs needed to reach a goal |
| Capital market assumptions | Expected returns and risks for asset classes, set by the firm at a date |
| Glide path | A planned reduction of risk as a goal date approaches |
| Benchmark | A reference index mix used to judge performance |
| Rebalancing | Trading back towards target weights |

### References

| Source | Version or date | Use |
|---|---|---|
| Directive 2014/65/EU (MiFID II) Articles 24 and 25 | Consolidated text on EUR-Lex | Best interest, suitability, reporting |
| Commission Delegated Regulation (EU) 2017/565 Articles 50, 54, 60, 62 | As amended, including Delegated Regulation (EU) 2021/1253 | Costs, suitability, periodic statements, loss alerts |
| SEC Regulation Best Interest | 17 CFR 240.15l-1 | US broker-dealer care obligation |
| SEC Release IA-5248 | 2019-06-05 | US investment adviser fiduciary duty |
| Uniform Prudent Investor Act | 1994 (Uniform Law Commission), as enacted by each US state | Prudence standard for trustees of private trusts |
| CFA Institute position paper on IPS elements for individual investors | 2010, cited by name only | Background reading |
| Firm capital market assumptions | [Version and date] | Expected returns in section 3.3 |

Related templates: Client Risk Profile (`finance/client-risk-profile`),
MiFID Suitability Report (`compliance/mifid-suitability-report`),
Client Portfolio Review (`finance/client-portfolio-review`), Strategic
Asset Allocation Study (`finance/strategic-asset-allocation-study`),
Responsible Investment Policy (`finance/responsible-investment-policy`),
Financial Plan (`personal/financial-plan`), Retirement Plan
(`personal/retirement-plan`).

## Standard and licence note

Based on Directive 2014/65/EU (MiFID II), Commission Delegated
Regulation (EU) 2017/565 as amended, SEC Regulation Best Interest
(17 CFR 240.15l-1) and SEC Release IA-5248, cited by article, section
and release number with requirements described in original wording.
EU legislation is reused with acknowledgement of EUR-Lex; US federal
material is public domain. The CFA Institute position paper on IPS
elements for individual investors is cited by name only; no text from
it is used, and this template is not affiliated with or endorsed by CFA
Institute. The structure, wording, formulas as applied and the
fictional examples are original. Check the current consolidated texts
and local rules, including pending EU Retail Investment Strategy
changes, before use. This is a document format, not financial,
investment, tax or legal advice. Template licence: MIT.