7246AFE Behavioural Finance and Wealth Accumulation (T2 2019) Investment Policy Statement Word length: 2,000 words plus Appendices Due Date: Monday 23rd September, 1pm (Start of Week 11) Weight: 40% Task Description: This practice-based assignment enables you to demonstrate your ability your understanding of wealth management issues with application to a “client”. It is expected that you will draw upon behavioural biases, asset allocation, lifetime advice concepts, and personal research into technical and communication issues in relation to providing advice. Using the workbook provided to assist you, important components of this task include: Identifying client objectives, needs and current financial situation by collecting information regarding: their current financial situation, their objectives and goals, risk profile information, behavioural bias diagnosis, cash flows (required and projected), and any other constraints. Provide evidence of your interview and data collection process in your Appendix. Analyse the information collected. Assess their risk profile and diagnose their behavioural biases and investor type. Assess the client’s human capital and financial capital interactions. Provide an explanation of this process and outcomes in your Appendix. Use asset allocation methods to determine the optimal allocation for your client. With an understanding of your client’s behavioural biases and investor type, adapt or modify the optimal allocation as appropriate. Provide an explanation of this process in your Appendix. 4. Communicate appropriate strategies and solutions to the client provided in written Investment Policy Statement report, using the IPS structure. The strategy should be explained in plain language, explain the nature of the proposed asset for investment and possible risks. The written strategy document (IPS) should also be tailored to reflect the preferences of your clients’ investor type, i.e. prefers education or big picture advice….