Most planners expressed frustration with client account statements in this year’s Planners’ Report Card, giving lower marks to most of the firms and pushing the weighted average down to 6.9 from last year’s 7.6.
A few firms seem to be on the right track, however. The rating at PFSL Investments Canada Ltd. rose. Manulife Securities International Ltd.‘s score edged up, as did Money Concepts Canada‘s; and W.H. Stuart & Associates rose to 6.6 from 6.3, even though it is still low.
Online statements for clients were also rated. The average for the nine firms with such access was 7.3, ranging from 8.2 for PFSL and Laurentian Financial Services to 6.1 at FundEx Investments Inc.
Top-rated PFSL is implementing a new back-office system “that will give us more control over client statements,” says Jeff Dumanski, executive vice president of marketing. It will allow for disclosure on compensation, personal performance and more, he says. Full implementation is expected by April 2006.
Investors Group Inc., which tied with Manulife Securities for the second-highest rating, is proud of its statements. “We provide graphical representations of summaries. One of the most enjoyed services is our capital gains and loss summary at the end of every year. We’re trying to organize the data in a way that eliminates confusion,” says Kevin Regan, IG’s executive vice president of financial services.
Manulife says it continually looks for ways to provide more specific content — “Whatever the advisors are looking for,” says Greg Gray, president and CEO.
Besides the Mutual Fund Dealers Association‘s mandate that all firms mail out statements, IQON Financial Inc. has gone a step further. It can produce a consolidated portfolio summary of all the business it holds on behalf of the client, including any business placed outside. “The reporting has the flexibility to provide pretty much an unlimited combination of information graphs, comparison to benchmarks and, in addition, time-weighted rate of return and performance information at both the account and portfolio level for the client,” says COO Jan Sampson.
Investment Planning Counsel president Chris Reynolds says: “It’s one thing to send a statement; it’s another thing to interpret what that statement means in relation to a client’s long-term financial objectives.” IPC offers more than 40 statement formats, so advisors can pick the one that best suits each client.
Laurentian introduced a new statement in the past three months. “We changed things around to distinguish mutual funds from seg funds, open funds from closed funds and also now include an asset-allocation chart,” says Steve Cole, national sales manager.
Peak Investment Services Inc. has three back offices. “Each has its own statement, but there’s a lot of flexibility around how the statement looks,” says Robert Frances, president and CEO. The online statement, which is standard, has been “completely changed” in recent months and now includes pie charts, which clients had requested.
The lowest overall rating for client accounts was Assante Corp.‘s 5.5, down from 6.0 in 2004. FundEx was 5.7, down from 6.3; and AEGON Dealer Services Canada Inc., rated for the first time this year, was 5.9.
Assante chairman and CEO Joseph Canavan says the statements for the firm’s managed solutions — Private Client, Optima and Artisan — “are pretty outstanding. Our advisors love them.” On the dealer side, he says, “We are upgrading our statements for the next statement period.” The firm does not yet provide consolidated statements, but plans to do so.
Asking for feedback
FundEx president and CEO David Vowles says: “We always ask for feedback from our advisors. We did a focus group with them and we have an advisor council that’s giving us feedback, as well. In terms of what we’re doing going forward, I think the first principle on statements is to get the information right and out in a timely fashion. Those are things we always focus on. You always need to strive to make sure that happens.”
As sister companies, ADSCI and Money Concepts have the same statements — but the Money Concept advisors like them more.
Scott Sinclair, president and CEO of both firms, says they are working on providing statements to clients online, along with some redesign. They are also building flexibility into the statements to provide the option of showing rate of return and full portfolio, for example.