Account Statements are a necessary evil of the investment world. We all get them, I choose electronic ones because its the green choice… But when was the last time you looked at the details or noticed that one was wrong?
In your mailbox each month you should not expect to receive anything, unless it is on the ‘quarter’ end of – march, june, september, december. These are the minimum legal requirements in Canada for account providers and product manufacturers. Currently dealer requirements under the MFDA are for a single statement per year, but that exception is going away by 2011.
The other thing that regularly hits the mailbox is a trade confirmation, a record of transaction details, like a purchase. It includes the name and symbol of what you purchased, the date, price, total and taxes, and through whom it was purchased. Make sure the details are accurate, and if there is a different broker name or anything else amiss, compare it against the statement or call immediately- the fund company, broker/planner, dealer, or account provider, never let it sit as most firms have a 45 day rule for errors.
What you should be looking for? When your broker told you he would purchase, did he say next day or that same afternoon? Is it there in writing? Confirm the price against the day by going to www.globefund.com orhttp://finance.yahoo.com and putting the name or symbol in the search box.
If its a mutual fund that you bought, did the advisor hand you (or email these days) a document that describes the fund risks and investment objectives ….and did you read it? Did he talk about the risks involved with that*specific* fund before you signed on the dotted line? The document is called a prospectus, and you should always ask for one. If you told your advisor that you want to purchase a ‘socially responsible fund’ this is the only way to ensure you actually got one besides the name.
Is it posible to get less statements or an all-in-one? Absolutely. These are called self directed plans (even with an advisor) or sometimes wrap-accounts. They have small fees, 10-15 dollars per month like your chequeing account. Notably, when you have this type of plan with all your diversified investments in it, you only receive the one statement plus confirms for transactions, instead of one from every company you deal with. And keep in mind, you can expect to reasonably deal with a minimum of one fundco (if that’s what you’re using) for every 20-25 thousand invested for a typical middleclass individual. This is only a guideline, talk to a professional about your particular circumstances.
Don’t forget to compare your statements against each other over time to look at the growth rate on the holdings so that you are prepared in advance of your next portfolio review. This way you can derive the value and answers that you deserve from your advisor, and they will be encouraged that you are participating and involved instead of doing the annual complaint ‘why aren’t my returns higher?’ conversation.
