Explore our investment policy workflow template. It guides you from setting investment goals to annual policy reviews for effective investment management.
1
Define investment goals
2
Identify the client's risk tolerance
3
Discuss possible investment strategies
4
Choose suitable investment types
5
Determine the investment time horizon
6
Decide on the asset allocation
7
Prepare a draft policy statement
8
Approval: Investment Adviser
9
Incorporate approved changes
10
Finalize the investment policy statement
11
Present the final policy statement to the client
12
Approval: Client
13
Implement the investment policy
14
Monitor the portfolio
15
Conduct an annual review of the policy statement
16
Approval: Annual Review
17
Make revisions if necessary
18
Approval: Revised Investment Policy
Define investment goals
In this task, you will work with the client to establish their investment goals. This is a crucial step as it sets the foundation for the entire investment policy. You will need to understand their financial aspirations, such as saving for retirement, purchasing a home, or funding their children's education. By determining these goals, you can tailor the investment strategy to achieve them. What are the client's long-term and short-term objectives? What financial milestones do they hope to reach? What are their current financial circumstances that can influence their goals?
Identify the client's risk tolerance
Determining the client's risk tolerance is crucial for building an appropriate investment portfolio. This task involves assessing how comfortable the client is with market fluctuations and potential losses. It's essential to ask questions like: What is their investment experience? Can they handle short-term volatility? What is their risk appetite? By understanding their risk tolerance, you can ensure that their investment strategy aligns with their comfort level and helps them achieve their financial goals.
1
Conservative
2
Moderate
3
Aggressive
Discuss possible investment strategies
This task involves engaging in a detailed discussion with the client about potential investment strategies. Consider their risk tolerance, investment goals, and financial circumstances. Ask questions like: What are their expectations from the investment? How much control do they want over their investments? Are they interested in active or passive management? This conversation will help identify suitable investment strategies that align with the client's goals and risk tolerance.
1
High
2
Moderate
3
Low
1
Growth stocks
2
Value stocks
3
Bond funds
4
Index funds
5
Real estate
Choose suitable investment types
In this task, you will select appropriate investment types for the client based on their investment goals and risk tolerance. Consider asset classes like stocks, bonds, real estate, and commodities. Ask questions like: Will the client benefit from diversification? What are the expected returns and risks associated with each investment type? By carefully selecting suitable investment types, you can ensure the client's portfolio is well-balanced and aligned with their financial goals.
1
Stocks
2
Bonds
3
Real Estate
4
Commodities
5
Mutual Funds
Determine the investment time horizon
The investment time horizon plays a crucial role in determining the appropriate investment strategy. This task involves understanding the client's time horizon for achieving their financial goals. Ask questions like: When do they expect to achieve their goals? How long are they willing to stay invested? Factors such as the client's age, financial obligations, and risk tolerance should be considered. By determining the investment time horizon, you can align the investment strategy with the client's specific needs.
1
Short-term (0-3 years)
2
Medium-term (3-10 years)
3
Long-term (10+ years)
Decide on the asset allocation
Asset allocation is a crucial part of the investment policy statement. In this task, you will decide how to allocate the client's investment across different asset classes. Consider their risk tolerance, investment goals, and time horizon. Ask questions like: What is the ideal balance between stocks, bonds, and other asset classes? How does the asset allocation align with the client's risk profile and investment strategy? By determining the asset allocation, you can create a well-diversified portfolio that maximizes returns while managing risk.
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Less than 25%
2
25% - 50%
3
50% - 75%
4
More than 75%
1
Less than 25%
2
25% - 50%
3
50% - 75%
4
More than 75%
1
Less than 25%
2
25% - 50%
3
50% - 75%
4
More than 75%
Prepare a draft policy statement
In this task, you will draft an investment policy statement based on the client's goals, risk tolerance, investment strategies, investment types, time horizon, and asset allocation. The policy statement serves as a guide for managing the client's investment portfolio. It should be concise, clear, and include all relevant information to ensure alignment with the client's financial objectives.
Approval: Investment Adviser
Will be submitted for approval:
Prepare a draft policy statement
Will be submitted
Incorporate approved changes
After presenting the draft policy statement to the client, they may request changes or provide feedback. This task involves incorporating the approved changes into the policy statement. It is essential to ensure that the final policy statement reflects the client's preferences, goals, and risk tolerance. By addressing the client's feedback, you can create a document that accurately represents their investment strategy and objectives.
Finalize the investment policy statement
This task involves finalizing the investment policy statement based on the client's feedback and the approved changes. Carefully review the document and ensure that it accurately captures the client's investment goals, risk tolerance, investment strategies, investment types, time horizon, and asset allocation. The finalized policy statement should be comprehensive, clear, and ready for presentation to the client.
Present the final policy statement to the client
Presenting the final policy statement to the client is a crucial step in the investment policy process. This task involves sharing the finalized policy statement with the client, explaining its content, and addressing any questions or concerns they may have. The presentation should be clear, concise, and tailored to the client's understanding. By effectively presenting the final policy statement, you can ensure that the client is fully informed and confident in their investment strategy.
Approval: Client
Will be submitted for approval:
Present the final policy statement to the client
Will be submitted
Implement the investment policy
Implementing the investment policy is the next step after the client has approved the final policy statement. This task involves executing the investment strategy outlined in the policy statement. It includes tasks such as opening investment accounts, purchasing investment products, and allocating the client's funds according to the asset allocation. By effectively implementing the investment policy, you can set the client's investment journey in motion.
Monitor the portfolio
Monitoring the portfolio is crucial to ensure that it remains aligned with the investment policy statement. This task involves regularly reviewing the client's investment holdings, assessing their performance, and making necessary adjustments. It includes tasks such as tracking investment returns, rebalancing the asset allocation, and staying updated on market trends. By consistently monitoring the portfolio, you can proactively manage risks and maximize returns.
Conduct an annual review of the policy statement
An annual review of the policy statement helps ensure that it remains relevant and aligned with the client's changing goals and circumstances. This task involves reevaluating the client's investment goals, risk tolerance, investment strategies, investment types, time horizon, and asset allocation. It includes tasks such as analyzing the performance of the portfolio, discussing any updates or changes with the client, and making revisions if necessary. By conducting an annual review, you can ensure the investment strategy continues to meet the client's needs.
Approval: Annual Review
Will be submitted for approval:
Monitor the portfolio
Will be submitted
Make revisions if necessary
This task involves making revisions to the investment policy statement if necessary. The annual review or changing client circumstances may require adjustments to the policy statement. It includes tasks such as updating the investment goals, modifying the asset allocation, or adjusting the investment types. By making revisions as needed, you can ensure the investment strategy remains aligned with the client's evolving needs.
