Financial services research firm DALBAR says that account statements provided by Canadian brokerage firms do an acceptable job of meeting basic investor needs for account information.

According to DALBAR’s 2001 rankings, brokerage statements are generally clear and avoid excessive and irrelevant information and industry jargon. The firm also notes that asset allocation information has now become standard.

The top rated firms are: MD Management; TD Evergreen; Royal Action Direct; Merrill Lynch; and BMO Nesbitt Burns.

However, there is still room for considerable improvement. “Critical industry weaknesses involve elements that are most important to investors,” said Manny Da Silva, director of DALBAR’s Canadian office.

DALBAR notes several weaknesses with brokerage statements. In general, statements do a poor job of showing investors what relevant services and options are available to them. DALBAR says that other than a few, uncostomized mass marketing messages, there is little being done to provide investors with relevant, value-added information.

In particular, no statements included in the survey compared investment performance to an appropriate benchmark. Statements also failed to provide investors with personalized rates of return.

Statements also do poor job of alerting investors of upcoming events or transactions that they should know about. According to DALBAR, no firm informed investors that capital gains will be taxed differently beginning in 2001. Only two firms informed investors that the foreign content limit would be increasing to 30%.

DALBAR also notes that statements fail to clearly report commissions paid. The survey found that a couple of firms include a commission column in the transaction detail section, but most do nothing to provide a complete summary of fees the client has paid.