Financial advisors consider Fund Facts mutual fund disclosure forms useful documents that provide important information for their clients, according to a recent survey.
In a survey of 50 advisors conducted by Fund Facts repository InvestorPOS in December, 88% of respondents said the forms are easy for clients to read, and 74% said they’re an ‘important’ or ‘very important’ tool for educating clients.
In particular, advisors like the fact that the forms are simple and concise, and that they’re more environmentally friendly than the longer prospectus documents.
“Investors love the simple layout and the details that it covers,” one advisor said.
Commented another advisor: “[It’s] much better than trying to get info from a ‘simplified’ prospectus. [I] appreciate less paper.”
Advisors also indicated that their clients like the uniformity in the presentation of information on the forms between fund companies.
A vast majority of the advisors surveyed – 88% – said they use Fund Facts forms to provide easy-to-understand information to clients. Other reasons for using the documents include compliance purposes, research, as a follow-up to a meeting, or for marketing purposes.
Since July 2011, mutual fund companies in Canada have been required to have the new two-page plain-language Fund Facts forms available to investors who request them, as part of the first stage of a disclosure reform initiative. Under the second stage of the regulatory initiative, expected to be implemented this year, the new forms would be delivered to clients who purchase a mutual fund, within two days of the transaction, in place of the prospectus.
InvestorPOS was launched in October by Toronto-based technology firm Vault Solutions Inc. The online repository features the Fund Facts forms for every mutual fund in Canada. It’s integrated with the System for Electronic Document Analysis and Retrieval so that the latest version of each Fund Facts is automatically uploaded to InvestorPOS in real time.
Advisors can use the website to have Fund Facts forms delivered to clients either electronically or via mail. Email has been the preferred delivery channel by far, according to InvestorPOS, with 95% of all Fund Facts orders delivered electronically.
As advisors adapt to the new disclosure requirements, they like having access to a repository that carries all of the Fund Facts forms in one place, according to InvestorPOS’ survey.
“While we are inundated with information these days, I am always looking to simplify my presentation of information to clients, as well as simplify the delivery method for us, as well,” said one advisor.