For years, planners have received complaints from clients concerning account statements. However, there appears to be an improvement in these vital statements, as this year’s Planners’ Report Card shows better marks in the category.
Overall, planners gave account statements an average score of 7.4 points, up more than half a point from 2003. Top marks went to Worldsource Financial Management Inc., for which the score climbed to 8.9 out of a possible 10 points from a dismal 6.3. The Markham, Ont.-based firm made some radical changes to its statements system.
“One thing we focused on was reporting what clients actually wanted,” says Anthony Stockley, president and COO.
“We’re doing some neat, innovative things with reporting, even going forward, and it’s all from feedback from our client base,” he says. “So our reporting reflects that. It allows planners to look at global asset allocation, true rates of return, how statements have performed on a monthly basis. And we’re able to present a lot of things visually, which was a real goal for us.”
Other firms have not hit the mark quite as well, partly because they keep experimenting with various ways to inform their clients.
The Mutual Fund Dealers Association of Canada is clear about what constitutes a proper account statement, yet some firms have been using portfolio summaries and consolidated reporting as well as account statements to communicate with clients.
MFDA Notice MR-0024, published Feb. 24, says such consolidated reporting is acceptable as long as it’s provided “in addition to, but not in place of, the account statements required by MFDA Rule 5.3,” and is clearly labelled.
Toronto-based Assante Corp.‘s account statement rating fell by a full point to 6.0, but its planners are optimistic the documents will improve. “[The statements] were good, then they were bad, now they’re getting good again,” says an Assante planner in Saskatchewan. (Mississauga, Ont.-based Unisen Inc. provides administrative support to Assante and some other financial services companies.)
Other planners say there are fads and cycles in account statement styles. “There’s a trend,” says an IQON Financial Inc. dealer in the Maritimes. “We’ve gone from two-page statements to eight- and 10-page statements — company statements have lost direction.”
Todd Hynes, president of Winnipeg-based IQON, says reporting is primarily in the hands of the dealers themselves. “The structure at IQON has always been that the advisors provide consolidated portfolio summaries to their clients based on our IQ advisor desktop software they use.”
At Mississauga, Ont.-based PFSL
Investment Canada Ltd., improvements to account statements are in the works but nothing has yet changed. The firm currently provides only the MFDA-required annual report. All other client statements come directly from the mutual fund companies.
“We find we’re at the mercy of the fund company,” says Jeff Dumanski, PFSL’s executive vice president, marketing. PFSL hopes to change the situation with an in-house system.
Planners at Cartier Partners Financial Services, based in London, Ont., are happy with their statements, rating them 0.5 higher than last year. “I use the template to make my own statements. I’m happy with it,” says an Alberta planner.
Planners at Winnipeg-based Investors Group Inc. are upbeat about the firm’s account statements and their rating has risen by 0.3 of a point. Says one Ontario-based planner: “Securities statements need work, but the mutual funds are the best in the industry.” That’s reflected in IG’s score in the category; at 8.7 points, it took a very close second place to Worldsource.
Online account statements is an area in which many firms appear to be lagging behind the needs of clients and planners.
An Ontario-based IG planner says firms “need to focus on this.” According to Advocis‘s 2004 Best Practices Manual: “40% of investors are interested in reviewing their portfolios at least once over the Internet.”
When Worldsource opened an “investor portal” on its Web site last year, it learned just how engaged in Web tools its clients already were. “We have a lot of clients who have adopted and use the online systems to check their portfolios almost on a daily basis, which surprised us a bit,” says Stockley.
Robert Frances, president and CEO of Montreal’s Peak Financial Group, says Peak’s clients are also satisfied with their online account statements: “Anything that gets rid of paper, they’re happy with.” IE