July 2015: A Review of Account Performance Reports

While account statements generally serve as the basis for understanding brokerage account health, performance reports play an important role in helping clients understand how their portfolio is behaving and, through extension, evaluate their financial advisor. In this month’s Broker Monitor Report, we review the various performance reports for the following eight full-service firms in our coverage set:

  • Ameriprise Financial
  • Raymond James
  • Edward Jones
  • RBC Wealth Management
  • Merrill Lynch Wealth Management
  • UBS
  • Morgan Stanley Wealth Management
  • Wells Fargo Advisors

Unlike our annual hardcopy statement analysis report, we did not actively solicit examples for performance reports from our industry contacts, instead relying on the reports we receive organically each quarter. As such, these reports represent the performance of live managed accounts, and may not display the full range of performance reporting options available to advisors at each firm. Because of the variations between accounts, we did not assign grades for this report. Of the eight full-service firms in our Broker Monitor coverage group, six sent dedicated quarterly performance reports tracking the growth of our advisor-managed accounts – though we did include performance tracking information for the remaining two firms.

Overall, these reports were roughly comparable across each of the six firms. Many of the analytics provided – growth over time, asset allocation, annualized returns – were standard for each performance report reviewed. Other metrics, like risk versus return analysis graphs, were less common and only included in half of the reports reviewed. We found that these six firms structured their performance review reports in one of two ways. In the most common format, firms relied on high-level summaries at the start of their performance reports, before expanding on the information later. While the other presentation adopted a broader approach and spaced out individual metrics on their own dedicated pages – a tradeoff of clarity over succinctness.

Additional key findings include:

  • All firms provide asset allocation information in a table and graph format, with three firms displaying the portfolio’s current allocation versus the targeted model.
  • Two of six firms include market commentary in their reports.
  • Only one firm provides information on the client’s investing profile.