Investment Policy Statement for Joe Client

Transcription

1 Investment Policy Statement for I. PURPOSE The purpose of this Investment Policy Statement (IPS) is to establish a clear understanding of the investment objectives, goals and guidelines for your portfolio and provide a means of monitoring your investment performance. This IPS is intended to provide guidance in the management of your assets yet is not intended to be overly restrictive given changing economic, business and market conditions. II. CLIENT RESPONSIBILITIES Your responsibilities in the investment process include communicating reasonable investment objectives, selecting mutual funds, and monitoring and evaluating your performance results to assure that policy guidelines are being adhered to and that objectives are being met.you should communicate with your Financial Advisor on a periodic basis and whenever there is a change in your portfolio objectives, goals or guidelines. III. STATEMENT OF OBJECTIVES Investment Objective: Growth Time Horizon: 48 years IV. PORTFOLIO GUIDELINES AND INVESTMENT POLICY Target Investment Balance: $25,000 Risk Tolerance: Aggressive Proposal Type: Asset Allocation among different styles of equity and fixed income portfolios Page 1

2 Investment Policy Statement for Asset Class Asset Class Proposed Allocation Name Abbreviation in % in $ US Large Cap Growth Eq LCG 15% $3,750 US Large Cap Value Eq LCV 20% $5,000 US Small/Mid Cap Growth Eq SMG 15% $3,750 US Small/Mid Cap Value Eq SMV 15% $3,750 Non US Equity INTL 30% $7,500 US Long Term FI LTFI 5% $1, % $25,000 Proposed Allocation We propose this allocation for your portfolio to assist you in making an informed asset allocation decision that will help you meet your long term investment objectives with the least amount of risk. The allocation was developed by applying an investment model, which is based on generally accepted investment theories, to analyze your responses to our questionnaire. Therefore, there is an objective correlation between the proposed allocation generated by the investment model and your responses to our questionnaire. The proposed asset allocation is not intended to forecast short term trends in the capital markets. Rather, it is intended to help in the strategic planning of the portfolio s asset mix, and is based on the relationship between the asset classes over long periods of time (more than full market cycles). The proposed allocation attempts to take advantage of differences in asset classes to create an asset mix that may provide you with the highest rate of return given your tolerance for risk. It is not based on specific investments and no tax considerations have been taken into account. In selecting an asset allocation, you should consider all of your assets, income and investments. Please keep in mind that Prudential Securities has no discretion with regard to your asset allocation decision in the Program, therefore, the ultimate decision will always be made by you. Page 2

3 Investment Policy Statement for Target balances and risk categories for your investment selections: Name Selected Allocation Target Balance Div. Option Risk Category PIMCO Rcm LC Gr D MF DLCNX 15% $3,750 PI Moderate Lord Abbett Affiliated A MF LAFFX 20% $5,000 PI Moderate Calamos Growth A MF CVGRX 15% $3,750 PI Aggressive Lord Abbett Md Cap Val A MF LAVLX 15% $3,750 PI Aggressive First Eagle Sgn Oversea A MF SGOVX 30% $7,500 PI Moderately Conservative Target Total Return MF TATBX 5% $1,250 PI Conservative Total 100% $25,000 V. INVESTMENT GOALS Portfolio Goals: Return goals should equal or exceed the return of a market index or blended index in proportions similar to the long term asset allocation selected for the Portfolio. Risk (volatility) should be less than the return volatility of the blended index of the portfolio. Mutual Fund Goals: Returns should equal or exceed the return of a broad market index and/or a style index comprised of securities of a nature similar to the manager s style over a full market cycle Risk (volatility) in each portion of the Portfolio is expected to be managed so that over full market cycles the fluctuation in the rate of return is consistent with the Investment Manager s investment discipline. It is unrealistic to expect that the Portfolio will meet every goal at any point in time. It will be the objective of the Portfolio to meet these goals over full market cycles or over the Portfolio s time horizon, as you direct. Page 3

4 Performance benchmarks for your investments selections: Name Investment Style Broad Market Index Style Benchmark PIMCO Rcm LC Gr D MF DLCNX US Large Cap Growth Eq S&P 500 Index Russell 1000 Growth Lord Abbett Affiliated A MF LAFFX US Large Cap Value Eq S&P 500 Index Russell 1000 Value Calamos Growth A MF CVGRX US Small/Mid Cap Growth Eq Russell Midcap Index Russell MidCap Growth Lord Abbett Md Cap Val A MF LAVLX US Small/Mid Cap Value Eq Russell Midcap Index Russell MidCap Val First Eagle Sgn Oversea A MF SGOVX Non US Equity MSCI EAFE MSCI EAFE VAL Target Total Return MF TATBX US Long Term FI LB US Govt. Credit LB US Govt. Credit A glossary defining the broad market indices and the style benchmarks for investment selections listed above is available upon request. A menu listing all available investment options in the Program is available upon request. VI. COMMUNICATIONS AND INVESTMENT PERFORMANCE REVIEW You will be provided with: Written confirmation of every transaction Monthly statements summarizing the valuation of the Portfolio and displaying a detailed list of transactions if there is account activity Quarterly Performance Report Since your circumstances and the capital markets and economic environment change over time, it is important that, at least on an annual basis, you reevaluate this IPS and the Portfolio s long term asset allocation to ensure that they continue to reflect your long term investment objectives, attitudes and expectations. Because different asset classes appreciate at different rates, it is also important to rebalance the Portfolio s actual asset mix to its original asset allocation policy. You may request a copy of your completed questionnaire from your Financial Advisor. You may revise your responses to the questionnaire and ask for a revised IPS reflecting your revisions at any time. Please call your Financial Advisor for a prospectus for any fund identified in the Investment Policy Statement. The prospectus contains complete information including all charges and expenses. Read it carefully before you invest or send money. Securities products and investment advisory services offered through Prudential Securities, 199 Water Street, New York, NY 10292, Member SIPC, and Prudential Financial Planning Services, which is a division of Pruco Securities, 751 Broad Street, NJ 07102, Member SIPC. Pruco Securities and Prudential Securities are both Prudential companies. Prudential Financial is a service mark of Prudential, Newark, NJ, and its affiliates. Page 4

5 ** FOR INTERNAL USE ONLY ** DO NOT PRESENT TO CLIENT ** Account Setup Administration Form Client Name(s): Date: Tag No: 0TK Questionnaire Name: Financial Advisor Name: John Consultant Account Number: 1 Proposed Allocation ID: T Did client accept Prudential Securities proposed allocation? Yes No CheckList: 3. Client Signs Program Agreement 4. Present ADV Brochure to Client 5. Present this form and IPS to Ops Mgr to complete Account Set Up on OFFAD 6. Present IA agreement to Ops Mgr for CP update (Doc Code=TW) 7. Drop Mutual Fund Order Ticket with symbol PRUCH Program Fee: Not Discounted Discounted to % ($100k Min) Program Fee Payment Option: Send bill in mail, and pay by check Charge directly to account Program Fee Redemption Fund Option: Largest Fund Position Across Allocation Fund Symbol: Quarterly Monitor Option: Standard (about 4 pages) Deluxe (10+ Pages) Automatic Account Re balancing Option: None Quarterly Annual Start Date Contacts: MARKETING QUESTIONS? Call OPERATIONS QUESTIONS? Call Financial Advisor Initials Branch Manager Initials *** Remember to consider the client s CP stated objective and risk tolerance *** Page 5

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