May 2014: Monthly Statement Analysis

In this report, we provide reviews of each Broker Monitor firm’s monthly statement and, using our proprietary Benchmarking Audit framework, rank the statements in different areas. We reviewed statements in three broad categories:

  • Design of monthly statements
  • Content provided within monthly statements
  • Other features, including e-Delivery and environmentally conscious options

Monthly statements from full-service firms continued to outperform those from discount firms based on the level of detail and depth provided within summary overviews, the way holdings are listed and the available transactions section. As a whole, full-service firms also provide better-designed statements in terms of presentation and the availability of a variety of customization features. Full-service firms’ monthly statements averaged 3.28 out of 4, whereas discount firms averaged 2.56. Since averages for each group diverged significantly, as does their expected audience, we looked at each group separately.

As a whole, discount firms’ monthly statements offer minimal account information and details, limiting content to essential account summaries and holdings data. Only two discount firms within the Broker Monitor coverage group offer both portfolio- and account-level summaries within statements. Beyond this, the quality of the account-level summary information varies greatly among the discount firms. The audit scores for the Account Summary category ranged from the high end at a 3.29 to the low end at a 1.59 out of 4. Another factor that impacted scores was the overall lack of holdings information beyond the most basic of details, as only one firm provides lot-level holdings information. Additionally, only two firms provide holding period details while under half display cost basis information.

Conversely, every full-service firm within the Broker Monitor coverage group provides a portfolio summary that offers a view of linked accounts held at the firm, along with detailed account-level summaries. All full-service firms also provide an income summary for the statement period and YTD, and all firms, except one differentiate between taxable and tax-exempt income. Full-service firms also provide in-depth and detailed holdings information within their statements, beyond basic data. All firms provide unrealized gain/loss at the position-level; and all, except one, also provide lot-level unrealized gain/loss figures.

Additional key findings include:

  • All full-service statements include a gain/loss summary that provides core figures with some context within a portfolio or account summary section of the statement
  • All full-service brokerage firms offer clients some type of customization option for monthly statements
  • Only one discount firm provides any statement customization options