Individual IPS

CFA Level III
#1

Two questions for the individual IPS:

  1. If there is an item like a trust distribution, if nothing is mentioned does this go straight to investable assets or does it go to cash flow? Or it doesn’t matter, cos anything excess in cash flow flows into investable assets anyways? 2. Are current payments made from investable assets (e.g. down payment for a house) considered a liquidity need? I have seen an example that doesn’t mention it as a portfolio liquidity need, but I disagree and think that whether it comes from cash flow or investable assets, a payment is a liquidity need.
#2
  1. Trust distribution typically will go into investible asset base (unless otherwise stated) for equation purposes. I guess the logic is that he would just invest the funds immediately. 2) I think you should always inlude it to be safe. From the questions i’ve seen, it is more often than not included… may have been one that didn’t, not sure why…
#3

Yeah i think the same, but in this case it went into cash flow first. But is it correct to say that it doesn’t matter whether it goes to straight to investable assets or to cash flow? Cos anything excess in cash flow flows into investable assets anyways?