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Statements: Good, bad and ugly
By Christine Dugas, USA TODAY
Do you need a glossary and a road map to figure out what your brokerage account statement is saying? Unfortunately, some firms make it harder than it needs to
be to keep track of your investments.
USA TODAY looked at account statements from 10 of the biggest retail brokerage firms. Most had both good and bad points, but a few stood out. Among the
best:
- Most innovative: The Edward Jones in-depth statement. It includes a graph of the portfolio's asset allocation compared with a model portfolio. It also has
a chart showing the distribution of a client's bond maturities, obviously aimed at encouraging investors to spread them out.
- Most egalitarian: Fidelity, which has one statement for all customers. And Edward Jones, which soon will let customers choose from three types of
statements, no charge.
- Best of the basic statements: Fidelity, because it compares a portfolio's market value with the previous period and clearly indicates how much of the
change was due to changing investment value.
- Best of the premium statements: Merrill Lynch CMA and Salomon Smith Barney FMA Plus. Comprehensive and clear.
- Special mention: Many statements tell investors the change in total account value from one period to the next, but the Schwab One Signature Platinum
statement calculates percent change. And it compares that with benchmarks, such as the Dow Jones average.
More comments:
- Many basic statements shortchange investors, but A.G. Edwards provides all customers with a clear summary page showing the total account value,
compared with the previous period.A.G. Edwards loses points on its UltraAsset account statement because of a confusing three-column layout for its activity
summary.
- American Express offers historical performance for mutual fund holdings, but doesn't show how the funds performed in the statement period.
- Edward Jones gets high marks for trying to satisfy all kinds of investors, but its at-a-glance statement doesn't say what contributed to the change in account
value.
- Fidelity's statement is mostly investor friendly. But it needs to cut the jargon, such as "debit balance."
- Morgan Stanley Dean Witter revised its statements to make them clearer. For example, it changed "income" to "dividends and interest."
- Merrill Lynch's CMA statement needs to explain what "purchasing power" is.
- PaineWebber's basic statement includes a customer's objectives and risk profile - both good to keep in mind.
- Morgan Stanley Dean Witter's Active Asset statement provides helpful information, such as when a stock's next dividend is payable.
- While Prudential's Command statement provides a clear summary of net worth, its descriptions of municipal bonds are typographically dense, making it hard
to pick out important things, such as maturity date.
- Salomon Smith Barney's FMA Plus statement includes helpful information, such as the brokerage's current rating on each stock. But its summary page is
busy. And the information doesn't seem to be arranged in any particular order.
- Deciphering brokerage statements
Sifting for information
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| Most brokers have more than one type of statement, for different customers or for those customers who want and are willing to pay for more information
each month. We looked at a variety of statements from the 10 largest brokerages. Here are some of the good and bad features we found: |
| Good | Bad |
| American Express: In the section called Historical Information, the
statement includes definitions on the same page as terms, so the investor
doesn't have to look for a separate glossary. | Charles Schwab: In the box that says Status of Key Values as of Dec. 31,
1998, it is hard to find the total account value. It's stuck in the middle of a
bunch of type where it's easy to miss. |
| Edward Jones: The in-depth statement clearly shows a graph of the
account's value over time. And in the Value Summary above, it shows the
change due to market performance. | Morgan Stanley Dean Witter: The basic account statement shows total
account value, but doesn't compare it with the account value at the end of the
previous period. |
| Merrill Lynch: The CMA statement has a section called Items for Attention
in which it alerts the investor that a CD is maturing soon. A good,
personalized approach. | PaineWebber: On the basic statement, the net account value is practically
hidden at the top of the page in small type. The eye more naturally goes
down to the earnings summary. |
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