Dalbar releases study of Investor Statement Preferences

TORONTO, Jan. 5 2011 – Dalbar’s U.S. 2010 Investor Statement Preferences study identifies the elements of the investor statement that are deemed most valuable by customers. The recently released study assists firms in finding additional opportunities to enhance their investor statements.
Second only to the counsel of financial professionals, the statement is the most powerful tool in influencing behaviour among financial services clients. It is the most widely read, the most frequently sent, and quite often the only personalized written communication received by clients. Financial Institutions in the US and Canada should take into consideration the results found in this study so that they can provide clear, concise and factual communication on client’s portfolios.

Dalbar’s Investor Statement Preferences study identifies the importance of the elements in investment and benefit statements and found:

  • As in the past, the overall rate of return in the account is the single most important statement item, with over half of the respondents considering this to be critically important
  • Total of fees charged was the second highest rated item investors want on their statement
  • Sections that summarize various aspects of the statement are most critical to understanding.
  • Over half of investors consider statement messages from their financial adviser to be important

A qualitative understanding of the feedback from investors in this study is supported by quantitative analysis, regulatory requirements, and industry best practices which all played a key factor in updating the statement evaluation criteria this past year.

“The financial services industry as a whole needs to pay attention to investor’s demand for rate of return data”, says Jody Bullen, Director at Dalbar. In the US, defined contribution firms clearly lead the industry when it comes to providing rate of return data. In the Canadian marketplace defined contributions firms are the leaders as well in performance reporting with 100% of the firms tested displaying the period ending rate of return figures. In the Managed Portfolio Statements study released last year, over 82% of the firms tested showed the period ending and the 12-month rate of return figures.

In the Mutual Fund Statements study released in Q3, 2010, Dalbar discovered that only 23% of the firms tested displayed the rate of return period ending figures; the figure was much lower in the Brokerage industry, with only 6% of the firms offering rate of return details to their clients.

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. www.dalbar.com.