ADP Investor Communications Corp. on Monday announced the launch of Smart Prospectus, the first regulatory-compliant, single-source fulfillment solution for delivering mutual fund prospectuses and trade confirmations to investors.

Smart Prospectus is a “print on demand” document delivery system that provides investors with the relevant portions of 100% compliant disclosure documents.

According to ADP, the new product also makes it simpler and less expensive for brokers and dealers to deliver compliant investor disclosure information, in paper or electronic format.

Smart Prospectus creates a customized prospectus for each investor that only contains information about specific funds purchased by that investor, rather than detailed information on the entire fund family. It also automatically creates a personalized cover letter and the trade confirmation to verify the purchase, both in the investors’ language of choice.

“Investment disclosure has traditionally been a source of aggravation for everyone,” said Sue Britton, vice president, business development, ADP, in a news release.

Before developing the new product, ADP undertook investor research to learn more about what investors are looking for in disclosure information. This research confirmed that many investors do not understand, or even read, the documents sent to them — either because much of the information is irrelevant or its purpose is not clear. The Smart Prospectus package changes this by eliminating irrelevant information and by clearly explaining the purpose of each component in the package.

Britton added, “Our clients, M.R.S. Inc and M.R.S. Securities Services Inc., are breaking new ground in this field.” She estimated that mutual fund firms can save up to one-third of the costs associated with fulfillment, mailing and inventory management of commercially printed prospectuses by:

  • offering electronic delivery for customers who choose this option;
  • mailing a condensed, print-on-demand version of the prospectus that only contains information on funds owned by the investor; and
  • combining the trade confirmation with the prospectus in one envelope, to reduce the number of mailings to the investor.

“We see Smart Prospectus as a win-win proposition,” said Scott Sinclair, president and CEO of M.R.S. Inc and M.R.S. Securities Services Inc.,, the first dealer to adopt the ADP solution. “We save dealers money and their clients receive more useful information.”

ADP received the required regulatory relief for Smart Prospectus on April 21. The ruling eliminates the need for individual dealer applications, and grants general approval for dealers to use the Smart Prospectus service.
http://www.newswire.ca/releases/May2003/26/c5296.html