The initial questionnaire should accurately identify the client’s circumstances, investment objectives, risk tolerance, and all investment restrictions and preferences. Review of the questionnaire responses is a great time for the advisor to assess the client’s investment sophistication and to provide the client with capital markets education.
The draft IPS is the initial IPS version, including the recommended asset allocation. Any areas of concern or things that are unclear should be thoroughly addressed at this stage. Discuss any unreasonable expectations with the client and make any needed changes to the recommendations in the IPS.
The last stage is a review and approval of final IPS as well as gaining the necessary signatures (client and advisor). A preliminary discussion of the investment implementation is then performed.
