Consolidated Account Reports ("CARs") are any document, report, or communication that is sent, delivered or otherwise made available to a client, in any format, which combines a full or partial list of financial assets across multiple accounts, sponsors and/or custodians. These reports often include such information as account balances, valuations, performance data and other account-related data. Examples would include, but are not limited to, account summaries, performance, statement of holdings, account activities, etc. Regardless of form or content, CARs constitute customer correspondence and must comply with both FINRA regulations and firm policies and procedures
In general, creating a spreadsheet listing the account numbers and account balances to provide to a client is considered a CAR and is not permitted. If you are providing the client with a list of accounts as part of financial planning output, you can submit that template to Ad Review in Pinpoint for pre-approval.
Cetera recently reminded us that putting a client’s account balance or a rate of return in the body of an email is considered a violation of the CARs policy and is not permitted. The reason account balances and performance information should not be sent in an email is because the body of your email becomes a Consolidated Account Report (CAR) itself when account balances or performance are included. The body of your email would need to be pre-approved by Ad Review, filed with FINRA, and include all applicable disclosures that an Albridge Report or QPR/Account Statement requires. If you wish to provide clients with a consolidated account report or a current value, you may use Albridge reports or reports generated from AdviceWorks or Smartworks. As always, those reports must include all required disclosures.
Cetera also advised that you cannot take select pieces of information out of an attached statement or report and restate it in the body of an email or letter to the client. For example, an attached statement includes the rate of return for the client’s portfolio. It is not permitted to restate that rate of return in the body of the email. The information included in an attached statement or attached report contains all the required disclosures and other relevant information and must be provided in its entirety.
Please see sections 6.1.6 and 11.3 of the Communications with the Public manual for more information on Cetera’s CARs policy.
Note: Account statements issued by broker-dealers, custodians, financial institutions, or product sponsors are not considered consolidated account reports.
Please contact the Prosperity Network Compliance Team with any questions: compliance@prosperityadvisors.com or 913-529-5500 Option 2.
Internal Use Only