Advisors across the board, regardless of channel or firm, have a lot to say about their account statements in this year’s Report Cards — and the majority of it isn’t good.

“I think they’re garbage. But they’re garbage everywhere,” says one Dundee Private Investors Inc. advisor in Ontario. The majority of his colleagues concur, rating their firms’ account statements as mediocre at best.

Although there is no denying the paperwork is important (advisors gave account statements an average score of 8.4 for importance), the statements themselves received an average score of only 7.3.

Online statements fared a little better. Advisors say they are less important than their paper counterparts (on average, online statements received a score of 8.0 for importance), but are slightly better executed, reflected in their 7.5 score.

Advisors have lots of ideas on how to improve their firms’ account statements. It seems just about everyone has his or her own opinion about what constitutes the perfect account statement.

Regulators, too, have definite ideas of what should be included in account statements — and those trump advisors’ views. The Investment Dealers Association of Canada and the Mutual Fund Dealers Association have set out the basic information that must appear on stock and mutual fund statements.

“Fixed-format statements issued by a firm’s regulatory-approved system must comply with the requirements in IDA Regulation 200.1,” says Connie Craddock, the IDA’s vice president of public affairs in Toronto, noting firms can issue their own consolidated statements in addition to official IDA statements.

The MFDA says duplicate statements from the fund companies and the advisor are a necessary evil. “A mutual fund investor is a client of both the issuer and the advisor, so it’s appropriate for both to issue statements,” says Karen McGuiness, the MFDA’s vice president of compliance in Toronto. “I’d rather have all information in the clients’ hands. If they want to toss it all out, fine.”

But advisors feel too much information is as bad as too little: too much information, and their clients don’t pay attention to what they receive.

A CIBC Wood Gundy rep in Ontario wishes his firm’s statements would simply state initial investment, rate of return and current value. “The ones we use right now are poor,” he says.

A ScotiaMcLeod Inc. broker in British Columbia says his firm’s statements should focus less on short-term fluctuations and more on long-term appreciation. “They highlight month-to-month changes, which you don’t want to emphasize,” he says.

For MFDA-member firms, the criteria of what constitutes a good account statement differs. For a Dundee Private Investors advisor in Ontario, consolidated statements top the wish list. “Clients need one easy-to-read statement for each account,” he says. “Three pages for each account is ridiculous.”

Prompt statements would also be nice, says an Investment Planning Counsel rep in Western Canada: “We had a lot of problems this year with clients getting them late.”

Design also needs improvement. “Our statements look like a moron designed them,” says a Manulife Securities International Ltd. rep.

Account managers at the banks also say their statements need work. But there is debate about how much information clients need.

“The plain mutual fund statement is very basic, and it is bad,” says a TD Canada Trust account manager in Ontario. At the other end of the spectrum, a Royal Bank of Canada advisor in the Prairies says that firm’s statements are too detailed: “Clients still don’t understand them because we’re disclosing too much information.”

Although many advisors in this year’s Planners’ Report Card complained about statement duplication (from fund companies and dealers), advisors at insurance companies say they’d like clients to receive statements more often.

“We should send out statements four times a year instead of twice,” says a World Financial Group Inc. rep in Alberta. A Freedom 55 Financial advisor in Ontario agrees: “I have clients who think they don’t get them often enough.”

Regional dealers also report statement woes. “Our clients are constantly searching for information on their statements,” says a Leede Financial Markets Inc. advisor in B.C.

A MacDougall MacDougall & MacTier Inc. advisor in Montreal blames his firm’s size for its statement shortcomings: “I attribute the quality of our statements to our lack of resources compared with larger firms.”

Ironically, a TD Waterhouse Private Investment Advice broker in Ontario told Investment Executive that he thinks boutique firms have better statements. IE

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