Canadian Brokerage statements failing to deliver value to clients
TORONTO, July 14 /CNW/ - Dalbar's 2010 Trends and Best Practices in
Brokerage Statements looks to recognize those companies whose statements
best meet investors' needs. To match consumer needs and to reflect
changes in the industry, Dalbar recently updated its evaluation criteria
for testing investment account statements. Results from various inputs,
such as advisory board meetings, consumer-facilitated sessions and
advisor focus groups were consulted upon and factored into the updates.
Of particular note, Dalbar surveyed a large pool of investors about
their preferences for statement content and design. The study asked
investors to prioritize 17 possible statement features, ranging from
graphic elements to specific types of informational content. According
to the results, the five most important statement elements are:
- Overall rate of return
- Summary of fees charged
- Sections that track investment goals and account growth
- Sections that summarize account details
- Asset allocation of accounts
With these results in mind, the top five ranked firms from this year's
study were:
Rank Company
1 Edward Jones
2 ATB Securities
3 RBC Direct Investing
4 TD Private Investment Advice
5 Scotia iTrade
Industry Benchmark 50.98
The results of the study were startling. Half of the 16 firms evaluated
failed to achieve 50 out of a possible 100 points, with the industry
average at 50.98 points, a decline of 13.28 points from the previous
study conducted. Today's clients are expecting high levels of value from
their financial statements, and Brokerage statements, many of which have
remained unchanged since 2005, fail to measure up. This contrast in
statement quality is especially apparent in comparison to other industry
segments, such as Mutual Fund, which has continually strived to provide
innovation in its statements. The need for improvement is clear
according to Anita Lo, Dalbar's Vice President of Canadian Strategy, as
"It may be a daunting task, but firms need to keep up with the changing
expectations of clients who deserve to have a clear and informative
statement about their financial health."
Several areas that were found to be lacking include offering rates of
return values, charts and visual aids, market gain/loss reporting, and
client messaging. These are statement features that are of vital
importance to clients, and it is a clear indication that the Brokerage
industry (with a few exceptions) is not providing the service or value
that clients deserve.
Dalbar was disappointed to see scores decline so dramatically following
the evolution of the statement evaluation criteria. Few best practices
were observed, in stark contrast to statements provided in the U.S.,
which combined innovative design and graphic tools, with comprehensive
and detailed account information. Canadian firms can no longer afford to
linger behind the U.S. in terms of statement innovation - its clients
are suffering as result, and it is time for firms north of the border to
step up.
To obtain a copy of Dalbar's 2010 Trends and Best Practices in Brokerage
Statements complete with rankings, please contact Anita Lo at
416.777.1103 ext 223 or anitalo@dalbar.ca <mailto:anitalo@dalbar.ca>.
About Dalbar Inc.: As the world's premier financial services strategy
and operations research firm, Dalbar, Inc. helps leading enterprises
develop, build, and operate strong businesses that deliver sustained
shareholder value growth. Dalbar's proprietary business design
techniques, combined with its specialized industry knowledge and
behavioural research expertise, enable companies to anticipate changes
in customer priorities and the competitive environment, and then design
their businesses and improve operations to seize opportunities created
by those changes. The firm serves clients in the Americas and Europe.