Q. I’m working on compliance. I have a question about SEC website Question IV.2 which requires advisors to add a legend urging clients to compare PortfolioCenter reports with statements from their custodians. The question/answer reads:
Q: Can an adviser voluntarily continue to send its own quarterly account statements to clients in addition to the statements that the clients receive directly from qualified custodians?
A: Yes. If an adviser voluntarily sends account statements, it must insert a legend required under paragraph (a)(2) of the rule urging the client to compare information provided in its statements with those from the qualified custodian in account opening notices and subsequent statements sent to the client for whom the adviser opens custodial accounts with the qualified custodian. (Modified March 5, 2010.)
Do you have some standard text we can add to comply with the legend in Question IV.2? We’d also like to include the fact that late dividends may be included in our reporting.
A. Indeed I do! In PortfolioCenter this “legend” is a report disclaimer. Mix and match from the choices below to craft a disclaimer that fits your situation.
Start with your ideal statement and then test it on your quarterly reports to see how it affects pagination.
If you prefer having this notice on every page, you may want to tighten the wording or choose the shortest possible version.
If you prefer longer text, consider placing your disclaimers on your invoice or a separate page to avoid awkward page breaks in your finished reports.
If you also use performance disclaimers, try placing the “compare your holdings” notice only on Holdings reports and your performance disclaimers only on Performance reports.
- You will receive an account statement on at least a quarterly basis directly from the qualified custodian that holds and maintains your assets. You are urged to carefully review all custodial statements and compare them to the statement provided by COMPANY. COMPANY’s statement may vary from the custodial statement based on accounting procedures, reporting dates, or valuation methodologies of certain securities. Please contact us if you have any questions.
- The market value on this report may vary slightly from the market value shown on your brokerage statement. This occurs because some mutual funds may be late in distributing monthly dividends.
- The data contained in these reports is compiled from statements provided by Brokerage Firms, Banks, etc. and while believed to be accurate is not warranted as such.
- You are urged to compare your custodian’s account statements with these investment reports.
- The performance produced herein is calculated by PortfolioCenter performance software utilizing custodian data downloads and manually entered material. Although we take every precaution to ensure accuracy, we are not able to guarantee complete accuracy.
Have a sample disclaimer you like better? Please send it and I’ll share it on the blog. (You’ll have to email me; I’ve turned off comments, due to the ridiculous amount of spam they attracted.)