Brokerage Statement Leaders & Best Practices
Monthly statements are often the primary form of communication between a firm and its clients, allowing brokerages to show each customer - clearly and simply - what they own and what they've done with their account recently. Given the challenging market environment, now more than ever it is essential for brokerage firms to provide a clear and complete account review to their clients via the account statement. Every year, Corporate Insight reviews the statements we receive through our client accounts by running them through our rigorous benchmarking audit criteria. Our analysis focuses on a number of different categories including design, content, customization and "green" issues such as e-delivery.In this year's review, Merrill Lynch provided the most impressive overall statement for the third year in a row. It provides an excellent portfolio summary in a feature-rich document that includes all of a client's linked accounts in a concise format.
The following firms have the strongest overall statements in their respective segment based on our criteria:
- Full Service Firms - Merrill Lynch, UBS
- Full-Service/Self Directed Hybrid Firms - Charles Schwab, Ameriprise Financial
- Self-Directed Firms - Banc of America, WellsTrade
- Wachovia and Smith Barney won top honors for their design and clarity, allowing investors and their advisors to customize the way information is sorted in certain sections to suit their needs.
- UBS and Merrill Lynch provided the most impressive content, including enhancements such as third-party equity research, detailed realized gain/loss sections and good account value comparisons.
- Merrill Lynch was also named the "greenest" firm; it's the only one to utilize recycled paper.
- Know your customer - while we realize it is not feasible to offer each and every client to have their own fully customized statement, it is a good idea for firms to avoid standard "cookie cutter" statements. Clients and their accounts - from account type to holdings and value - are different, and statements should reflect information that a particular client wants and needs.
- Be mindful of clarity and simplicity - When reporting to other financial professionals, complex language may be appropriate, but plain language should be used when possible in standard client statements.
- Use space efficiently and effectively - A statement should provide as much information as possible in a limited amount of space.
- Focus on consistency, flow of information and grouping related content - Consistency is essential throughout the statement for readability and easy navigation. Firms should avoid tripping up readability with multiple font types, colors and sizes.
- Offer the flexibility of e-delivery - Electronic delivery of statements offers benefits to the firm as well as to the client.
As the markets and economy begin to recover, brokerage firms will need to do whatever they can to rebuild trust. The monthly statement is one tool they can use to accomplish this and employing some of these best practices is a good place to start.As the markets and economy begin to recover, brokerage firms will need to do whatever they can to rebuild trust. The monthly statement is one tool they can use to accomplish this and employing some of these best practices is a good place to start. In this year's review, Merrill Lynch provided the most impressive overall statement for the third year in a row. It provides an excellent portfolio summary in a feature-rich document that includes all of a client's linked accounts in a concise format.
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