Client Statements Still Fall Short Across All Industries In Answering the
Question "What am I Paying?" - DALBAR releases reports on Investor Statements
Boston, MA, Feb. 5, 2013 (GLOBE NEWSWIRE) -- DALBAR, Inc. announced the
release of its 15^th annual Trends and Best Practices in Investor Statements
reports for Brokerage, Mutual Funds, Annuities and Retirement Plans. These
reports evaluate the statement's ability to address the needs of both the
investor and the financial professional.
The public fears of financial services that were ignited by the enormous
losses of 2008 continue to grow. In turn, these fears have eroded the trust in
financial markets far more than volatility or weak performance. The financial
services industry has the weapon to fight this crisis in confidence: the
client statement. By far the most visible communication to clients, the
statement could be the Trojan Horse to enter every home with a reassuring
message of accountability.
The following firms have taken a leadership role in attempting to regain
client trust by providing a clear answer to the question of how much clients
are paying for their mutual fund investments:
*BlackRock takes the mystery out of operating expenses by providing a
paragraph that explains the funds' operating expenses. This paragraph is
prominent as it is large and in the first page margin of the statement.
They also put a dollar value on the estimated operating expenses paid.
Saying "you paid $335.83" in fees means far more to an investor than
saying "you paid 120 basis points."
*Merrill Lynch provides the most information about mutual fund fees in the
brokerage industry. The statement not only outlines the expenses
associated with the funds in the account but further clarifies the effects
of the fees with a hypothetical example of how the return on assets is
impacted by said fees.
*Principal is the only firm within the Retirement Plan statements evaluated
that addresses investment related expenses as a dollar amount. The fees
are indicated for each fund and include a note identifying what the fee
was for in terms that are easily understood.
"Rebuilding trust with regards to fees is remarkably simple and very low
risk," said Kathleen Whalen, Managing Director at DALBAR. She added, "Stating
what total feeswere or what the fees are likely to be, highlighted on the
medium of the client statement, produces the desired effect of openness."
DALBAR takes a systematic approach to evaluating statements using a method
that has been developed and refined over the past two decades. Statements
earned credit for including features that strongly impact an investor's
ability to act prudently and make financial decisions. Features include the
ability to understand the significance of the information, answer pertinent
questions and utilize design elements that enhanced their overall
effectiveness. The table below includes the firms that rated "excellent" in
each industry sector:
Firms Awarded DALBAR's 'Excellent' statement designation in 2012
Brokerage Mutual Fund Defined Contribution Defined Benefit
Baird BlackRock American Funds MassMutual
Edward Jones Lord Abbett Mass Mutual Prudential Financial
Merrill Lynch Transamerica Merrill Lynch
Morgan Stanley Principal Financial Group
National Financial Prudential Financial
Raymond James T. Rowe Price
For more information on the 15^th Annual Trends & Best Practices in Investor
Statements reports or on DALBAR's Statement Evaluation services, please visit
the web site at www.dalbar.com or contact Brooke Halloran at 617-624-7273 or
DALBAR, Inc. is the financial community's leading independent expert for
evaluating, auditing and rating business practices, customer performance,
product quality and service. Launched in 1976, DALBAR has earned the
recognition for consistent and unbiased evaluations of investment companies,
registered investment advisers, insurance companies, broker/dealers,
retirement plan providers and financial professionals. DALBAR awards are
recognized as marks of excellence in the financial community.
CONTACT: Kathleen Whalen
DALBAR, Inc. Logo
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