SEE NEWS ABOUT PROSPECTUS-RELATED LAWSUITS
Auditing and Verification Services
verify the accuracy of prospectus fee tables,
share class sales limits, suitability
text, and online tools. We guarantee our
work and provide independent attestation
letters from a CPA, CFA, and securities
we can't help, or that there's no risk? Take our
and then decide.
cuts across many investment types. Take mutual fund share classes. In the past, investors often bought
an unsuitable share. When the regulators stepped in, the problem was fixed, so everyone thought.
Counsel and auditors told fund boards that
all was well. But buried deep in the math, problems
still buy fine products -
wrap programs, VAs, funds -
that are unsuitable for their situation. Prospectus
inaccuracy is one cause.
Another is the pull of conventional wisdom.
The problem takes many forms. We found
and fixed the following ones for our clients.
In the fee example, B-share cost figures were far too high. The share looked
uncompetitive when, in reality, it was often best. The B/A "flip" had been forgotten. This is one of several ways to get costs wrong.
∑ Brochure: "In the long-term A-shares almost always outperform."
So said one brochure. This was true for the firm's stock funds, but not
its bond funds. (This firm also transposed stock and bond pay scales in 25 prospectuses.)
∑ Online Calculator: The A-share load was forgotten.
Also, both returns and
expenses were improperly calculated.
A-shares were presented as the best share class by a wide margin. The actual margin
was tighter or zero.
∑ B-Share Sales Limit: A fund firm set a limit of $49,999 on all B-shares. A partner B/D was
more restrictive, setting it at $24,999. In fact, for several funds, the limit should
have been $249,999, so said the math.
2/1/09, most of the top 20 load fund firms had at least
two of the problems; several had three or
Broker Village is in a unique position to help
fund firms identify and fix issues
before they manifest, protecting their profits and brand. Fixes
are fast, easy, and inexpensive to
implement. Our firm has provided these services for years. We provide analytics and consulting to fund firms, B/Ds,
and regulators. We will determine if:
a) Conflicts of interest exist at the advisor, B/D,
or fund firm levels;
b) Share class sales limits are suitable, particularly for typical trade sequences;
c) Fee and performance tables are accurate and consistent with
d) Textual rationales are consistent with the math.
here to see exactly how we can help you.
We also offer our Share Class Analyzer.
It creates perfectly accurate prospectus
expense examples. It shows account values,
costs, rep pay, and revenue for any class of any fund. It is
licensed by the regulators and audited by independent
CPAs and a securities lawyer.
tools and verification services can help your firm:
∑ Investors can evaluate share classes more
objectively and avoid paying undue fees
∑ Compliance officers can ensure the accuracy
of prospectus figures and related suitability text
Boards of Directors can ensure
that prospectus content satisfies
new SEC mandates
I.T. can create online tools where the results precisely match
those of the regulatory sites.
∑ Product development can model how portfolio
attributes affect a fundís competitive profile
∑ CFOs can evaluate the financial impact
to the firm of launching, closing, or re-pricing a fund
∑ Sales executives can ensure that advisor
pay is competitive yet free of conflicts of interest
Accounting staff can more quickly and accurately create prospectus
Marketing can more quickly and accurately create sales material