Tool 6 of 14

The Investment Policy Statement

The family sets the purpose. The adviser sets the portfolio. We hold them to it.

The scenario

Meet the Hartleys (fictional)

Margaret was widowed eight months ago. The family business was sold in 2024, leaving about $82m across eight structures: five companies, a family trust, a unit trust and a super fund. Her private bank wants the portfolio reinvested within 60 days, and she does not know who now holds the family trust’s appointor role.

  • MargaretAge 58

    Widowed eight months ago (Richard). Sole director of all five companies.

  • JamesAge 31

    Commercial lawyer, married to Priya, one child.

  • SophieAge 27

    Ceramic artist, irregular income.

  • TomAge 19

    Engineering student.

  • Family Trust discretionary
  • Investment Trust $38m
  • Property company $14m
  • Distributions company $6m
  • Super Fund (SMSF) $7m
  • Held personally $17m
  • About $82m · eight structures

The Investment Policy Statement

What it is

What it is

A written statement that links the portfolio to what the wealth is for. The family sets its objectives, liquidity needs and limits. The licensed investment adviser sets the asset allocation and selects products. We report against the Statement on our reporting platform and hold the bank or adviser to the mandate on the family’s behalf.

What the family gets
  • A written objective, return target and liquidity reserve
  • Limits on concentration and illiquid assets
  • Quarterly reporting to the family against the Statement
  • A clear line between the family’s decisions and the adviser’s
Step by step

How it works

  1. Purpose

    The family agrees what the portfolio is for.

  2. Limits

    Liquidity, risk and any exclusions.

  3. Mandate

    The adviser recommends; the family appoints.

  4. Oversight

    Quarterly reporting against the Statement.

Illustrative sample

A worked example, using the Hartley family

The Hartley Investment Policy Statement

Illustrative sample
ItemSet byHartley position
ObjectiveFamilyPreserve real value after distributions, across generations
Return objectiveFamily, with adviser inputCPI + 3.5% a year after fees, over rolling seven years
LiquidityFamilyTwo years of distributions plus known commitments, held outside the warehouse
LimitsFamilyNo single holding above 10%; illiquid assets capped at 25%
Allocation and productsLicensed adviserPer the adviser’s recommendation
OversightConfiance, on our reporting platformQuarterly to the Family Council
The family setsPurpose and limits

Objective, return target, liquidity, constraints.

The adviser setsAllocation and products

Under a mandate tied to the Statement.

We make sureIt is followed

Quarterly reporting, and the adviser held to the mandate.

The $14m warehouse is outside the portfolio mandate but is counted in the concentration limit.

The Hartley family is fictional and all figures are illustrative. This material is general information only and is not personal financial, tax or legal advice.

Where it’s used

See it

WEALTH PICTURE

Holdings reported against the Statement on our reporting platform.

Solve it

TRANSITION · ADVISER SEARCH AND REVIEW

Agreed before any reinvestment; the brief for any adviser search.

Run it

PRIVATE OFFICE

Adviser oversight, summarised in the Family Charter.