A family investment policy is both a portfolio document and a governance tool. Its value depends on whether people can use it to make decisions.
Define purpose before allocation
Capital may support current spending, future generations, philanthropy, entrepreneurship, or several goals at once. Each purpose has a different time horizon and different tolerance for loss.
Separating these purposes creates a clearer foundation for allocation and makes trade-offs easier to explain.
Name the decision makers
A policy should state what the family decides, what an investment committee decides, and what can be delegated to an advisor. It should also explain how exceptions are documented.
Clarity matters most during periods of disagreement, transition, or urgency.
Make review conditions explicit
A policy should not change because markets are uncomfortable. It should be reviewed when the family's objectives, liquidity, tax position, governance, or ability to bear risk have changed.
Scheduled reviews create a healthy cadence. Event-driven reviews make sure the policy remains connected to real life.
This fictional publication is for demonstration and general educational purposes only. It is not personalized investment, tax, or legal advice.