Every Tuesday, Corporate Insight releases recommendations to help financial services firms improve a key aspect of the online user experience. Recommendations are taken directly from our Monitor Reports and Consulting Services research, which cover the banking, brokerage, credit card, asset management and insurance industries.
#1 Present statements in an organized and easy-to-read layout – While account details are ultimately the most important part of a quarterly statement for clients, the way these details are displayed also contributes to the statement’s effectiveness. It is essential that contract information be displayed in a clear and concise manner. Statements should feature prominent section headings, generous spacing and a large font so that they are easy to read. Firms should also highlight pertinent contract values at the top of the document in boldface or enlarged font. AXA Equitable prominently displays the contract value and basic account information in distinct borders with shading and bold font.
#2 Add color to enhance statement appearance – The addition of a colorful background or section heading can help bolster the document’s aesthetics and overall professionalism of the firm. Firms can also utilize color for the company logo and hypothetical illustrations or graphs, which is featured on Jackson National and Vanguard’s quarterly statement.
Jackson National Account Statement
#3 Offer full disclosure of contract fees and surrender information – The level of transparency offered by firms with regards to contract fees and surrender information continues to vary greatly. Up-to-date surrender charges and values should appear on all statements, along with the total contract fees and charges. This information is imperative, as it shows the costs of owning and potentially closing their contract. ING and Transamerica provide clients with the highest level of transparency with the most extensive collection of contract fees and charges. The two firms include maintenance, administrative and recapture fees for the current quarter and since inception on their statements.
#4 Include a quarterly transaction history – Offering a transaction history, preferably at the end of the document, helps clients monitor contract activity, such as financial transactions and fees. Transaction histories also provide an easy way for clients to detect any errors or fraudulent activity. Jackson National’s statement includes a detailed transaction history providing the date, investment division, transaction type, number of units, unit value and amount for each transaction item.
#5 Offer a comprehensive selection of contract performance data – Annuity clients should be able to view a detailed investment summary on their statements. An essential component is net performance results over multiple timeframes, preferably quarterly, year-to-date and since inception. The most effective and easy-to-understand contract performance is the personal rate of return, which is underutilized by most firms. Transamerica and TIAA-CREF are the only firms to offer personal rate of return data, showing percentages for the period, year-to-date and since policy inception.
#6 Provide summaries focused on asset allocation and current holdings – For variable holdings, asset allocation and investment option summaries offer an in-depth look into the current state of the annuity contract. Effective investment option summaries provide quarter beginning and end units, unit values and total values, along with the net performance of each held investment option. Asset allocation information should also include allocation percentages for future contributions. Utilizing pie charts is a useful way to visually represent the contract’s asset allocation and add value to the overall statement effectiveness. In addition to providing a pie chart, Vanguard also includes a line graph to illustrate the fluctuations of the client’s contract value from previous years to the current quarter.