Changes have been made on investment statements to help increase investor understanding. Research indicated investors want to better understand “How am I doing?” and “What is it costing me?” The purpose is to implement a standardized clearly designed, plain language report.
There are two new sections that will be included in your December 31, 2016 statement from Manulife Securities: Annual Performance of this Account and Annual Charges and Commissions for this Account. One is for fees and the other is for performance. Let’s take a closer look at these two new reports and what they mean to you.
‘Annual Performance of this Account’ report
Internal rates of return (IRR) calculation will now be used as an industry standard going forward. In the attached summary by Manulife Securities Internal rate of return … the new math, it explains “Until recently, Modified Dietz was the industry’s favoured method for calculating personal rates of return, largely because it’s a simple calculation. However, the Modfied Dietz calculation takes mathematical shortcuts, which means it can only estimate the true money-weighted rate of return.” In short, the new IRR calculation is regarded as being a more precise method and will now be the industry standard going forward.
‘Annual Charges and Commissions for this Account’
Any account charges or commissions received by Manulife Securities will be listed on your statement. From there, Manulife Securities shares a portion of this with your advisor (i.e. Farrow Financial) to service your account and provide advice.
What’s the take-away? It is designed to give Investors some more detailed insight on both performance and fees. It helps to further educate investors and encourage deeper understanding. Today's investors have many options; it's a matter of working with your investment advisor to find the best fit.
At Farrow Financial we strive to serve our clients in the best way possible, and provide ongoing valuable information to help our investors learn and grow. As always, you have any questions please call us. We're here to help.
Stephanie Farrow, B.A., CFP., Stephanie has over 20 years’ experience in the financial services industry, a diploma in Financial Planning from the Canadian Institute of Financial Planning and a Certified Financial Planner designation. Stephanie has been writing a financial planning column for the local business magazine Elgin This Month since 2010. Stephanie and her husband Ken Farrow own Farrow Financial Services Inc. About our Farrow Financial Team.
Manulife Securities and the block design are registered service marks and trade marks of The Manufacturers Life Insurance Company and are used by it and its affiliates Manulife Securities Investment Services Inc. Manulife Securities Investment Services Inc. is a Member MFDA IPC.