Footnote Examples
Contents
Important Disclosure Infomation
Your footnotes may need to meet requirements of your Compliance Officer. We offer these only as examples. They came from users of Advisors Assistant.
Some users have different footnotes for performance reports and others use the same footnotes for both non-performance and performance reports.
Investment Advisors and Registered Representatives may have different disclosure requirements. Broker Dealers have different requirements. Some examples are from RIA's and others are from Registered Representatives who may also be RIA's. There is a broad spectrum of information shown in footnotes. However, you should notice that most have several elements in common.
Client Marketing Systems, Inc. makes no representation that any of the footnote examples below meet any requirements of regulators. They are shown only as examples.
Check with your Compliance Officer for their footnote wording requirements.
Investment Report Examples
If you are using the Performance Reports, you may need to add additional language and explain calculation methods, depending on your Broker Dealer's requirements.
Example 1
This report has been prepared by [Rep's Name] for information purposes only and does not replace the statements you should receive directly from [Custodian Name] or Investment Sponsors. This report has been prepared from data believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as a general guide to portfolio value. The figures represented should not be relied upon for tax purposes.
Fees and sales charges paid are not reflected on this report. The absence of fees listed in the fee column does not mean you did not pay a sales charge for purchases.
Securities offered through [BD Name], Member Finra/SIPC
Example 2
Securities and investment advisory services offered through [BD Name], Member FINRA/SIPC and a registered Investment advisor. Additional advisory services offered through [Firm Name], a registered investment advisor not affiliates with [BD Name]
The information contained in this report reflects activity for periods shown and is based on sources believed to be accurate, however it cannot be guaranteed. It is neither an official statement of your account(s) with [BD Name]. nor has the data been audited or verified by [BD Name], correspondent, individual sponsor(s) or custodian(s) as to its accuracy. Please refer to the confirmation notices and client statements that you receive directly from them. Prices, yields and total returns will fluctuate. Some securities listed may not be liquid. Prices shown may reflect an approximate or estimated value, and not necessarily reflect actual selling or market price. Tax deferred accounts/products (such as variable annuities) have various rules and restrictions that apply regarding accessibility of funds, tax consequences and other factors.
Past performance may not be indicative of future results. Therefore, no client should assume that the future performance of any specific investment or investment strategy will be profitable or equal to past performance levels.
For fee-based accounts only: The figures may or may not reflect the deduction of investment advisory fees. If the investment is being managed through a fee-based account or agreement, the returns may be reduced by those applicable advisory fees. Refer to your Advisor’s Form ADV, Part II. The information contained in these reports is collected from sources believed to be reliable. However, you should always consult your statements received directly from product sponsors. If you have any questions regarding your report, please call your advisor.
This Consolidated Report was prepared by Financial Advisor, [Advisor's Name] using Client Marketing Systems, Inc. Supporting documentation is available upon request.”
Example 3
Disclosures
•The foregoing report has been prepared with data believed to be reliable but no guarantee as to its accuracy is made or should be implied. This report is for informational purposes only and may not reflect all policies, contracts, holdings, or transactions, their values, costs, charges, or proceeds in your account. This report should not be relied upon for tax purposes. Values may have been rounded to the nearest whole dollar amount. The values in this report are as of the date indicated. The actual value will fluctuate and may be worth more or less than the amount originally invested. Applicable fees and expenses that could affect values and performance may not be reflected. Past performance is not indicative of future results. If applicable, the values for life insurance and annuity benefits may be reduced by any policy loans or withdrawals.
•Clients should review and retain individual brokerage account, mutual fund, annuity, insurance, and/or sponsor statements and compare them with the values included in this report for accuracy. This report is not a substitute for those statements. If there is any discrepancy, clients should rely on their statements. Please promptly report any inaccuracy, discrepancy and/or concern by contacting the [Dealer Name ] Compliance Department at [phone number].
•Any assets shown on this report as not held with [Dealer Name], are not included in [Dealer Name]'s books and records and the values shown cannot be verified by [Dealer Name]. Values used for assets not held with [Dealer Name] may be based on information supplied by you, the client. These assets may not be covered by SIPC. Retain and review your source of data regarding these assets. Assets not sold through [Dealer Name] (such as partnerships, limited liability companies, non-traded real estate investment trusts) do not constitute a judgment by me, your registered representative, or [Dealer Name] that those assets are suitable.
•Securities products are not FDIC insured and may lose value.
•If you have any questions regarding the information in this report, please contact me, or [Dealer Name & Phone Number].
Additional Disclosures for Direct Participation Programs (DPPs)
The following information applies to any Direct Participation Programs (DPPs) shown on this Report:
•The per share estimated value is from information made available by the product sponsor and is presented without inquiry or investigation. Such information may be up to 18-months old and may not reflect the current market value.
•This type of investment is generally illiquid. No public market currently exists for this investment, and even if you were able to sell it, the value you receive may be less than the per share estimated value.
•Additional information about redemption options (if any) and the per share estimated value reflected on this report may be available from the product sponsor.
If the value of any DPP is noted as “N/A,” this additional information applies:
•There has been no information regarding valuation disclosed by this product sponsor for at least 18 months.
•The value of the investment will likely be different than its purchase price.
•Accurate valuation information may not be available.
Performance Report Examples
Example 1
The Account Performance Summary that Advisor provides is for informational purposes only. It is not intended to replace your statements and/or confirmations or to represent any implied Internal Rate of Return (IRR.) Please utilize your [Custodian Name] statements as well as any other Third-party custodians to calculate your Dollar Weighted Rate of Return based on all internal account cash flows.
Example 2
This is not an official [BD Name] statement and does not replace the statements you should receive directly from [Custodian Name], the investment sponsor, or any other outside custodian. This report has been prepared by [Rep Name or Business Name] and is for informational purposes only. The information in this report has been prepared from data believed to be reliable, but no representation is being made by your advisor. Values shown should only be used as a general guide to portfolio value and may vary from the actual liquidation values. The information in this report should not be relied upon for tax reporting, accounting, or valuation purposes. Past performance is no guarantee of future results. Current values may be lower or higher than the values shown. We urge you to compare the information (eg. market values, transactions, inflows, outflows, and fees) in this report with the information provided in the account statements you receive directly from [Custodian]., the investment sponsor, or custodian of the assets. If you are not receiving statements from your custodian, please contact your custodian directly or call [Custodian Name] at [Custodian Phone Number].
Securities Offered Through [BD Name]l, Member Finra/SIPC
Example 3
Past performance does not guarantee future results.
Advisory services offered through [Firm Name]. Securities offered through [BD Name]., member FINRA/SIPC. [BD Name]. and [Firm Name] are non-affiliated companies.
Example 4
This information as downloaded from [Custodian Name(s)] reflects values as of the valuation date only. It is not a projection of any future values.
Check each prospectus for complete details and fund performance. Time weighted rate of return is the method preferred by the Association For Investment Management & Research. Advisors Assistant uses the Daily Valuation Method, which requires that a security be valued anytime there is a cash flow (a transaction). The market values from and to may include additions and withdrawals. Past performance is no guarantee of future results.
"Securities and Investment Advisory Services offered through [BD Name]. Member FINRA SIPC. [Firm Name] and [BD Name]. are unaffiliated."
"Values are from sources deemed reliable but not guaranteed - you should still refer to the statements from the actual sponsor company."
Return Definition & Method
If you need to include the definition and method of calculation of the rates of return, here is some language to use:
Dollar Weighted Return
Dollar Weighted Rate of Return is a method of calculating a rate of return that is influenced by cash flows that take place in the account.
The MWR is calculated by dividing the gain or loss for the period by a weighted average of the amount invested. Each cash flow is weighted for the number of days it exists in the asset or portfolio during the measuring period. The result is multiplied by 100 to convert it to a percentage.
Time Weighted Return
Time Weighted Rate of Return measures the performance of $1 invested in the asset or portfolio for the complete measurement period.
Time Weighted Rate of Return is a calculation method that eliminates the impact of cash flows on the calculation.
Advisors Assistant calculates Time Weighted ROR (Rate of Return) using the Daily Valuation Method based on formulas provided by the CFA Institute (www.cfainstitute.org). The Daily Valuation Method is used so that there are not distortions due to large cash flows. More information may be found at http://funds.rbcgam.com/pdf/tools/daily_val.pdf. Advisors Assistant calculated to 7 decimal places and stores 5 decimal places rounded.
See Also