Guide to Reading Your Morgan Stanley Smith Barney Statement Integration Supplement

Transcription

1 Guide to Reading Your Morgan Stanley Smith Barney Statement Integration Supplement In general, the new Morgan Stanley Smith Barney ( MSSB ) statement that you will receive contains the information that was on your prior statement, although in a new format. As would be expected, this new format may present information in different sections and/or be labeled differently. To become familiar with the new statement format, we recommend that you refer to the Appendix for a mapping of key components from your prior statement to the new statement. We also encourage you to review the Guide to Reading Your Morgan Stanley Smith Barney Statement which can be found at: if you have already signed up at MSSB Online. Transition Center if you have not already signed up at MSSB Online. Table of Contents 1 Introduction 2 New Features 3 Changed Features 4 Frequently Asked Questions 6 Appendix A: Statement Components 7 Appendix B: Product Categories Also included in the Appendix is a list of product categories that are contained within the Holdings (equivalent to Portfolio Details) component of the new statement. For the most part, the categories are the same or similar to those in the prior statement but some of the key differences have been noted.

2 New Features With the new MSSB statement, you will see some new features, as well as reporting differences from the prior statement. Some examples include: One of the features of the new MSSB statement is a CHANGE IN VALUE table, which is similar to the Portfolio Summary component on the prior statement. Its elements include Contributions/Withdrawals, Security Transfers and Change in Value, which normally also appear on the OVERVIEW OF YOUR ACCOUNTS page for linked accounts. The Change in Value calculations include accrued interest in the Total Beginning Value and the Total Ending Value. Where appropriate, accrued interest will also be displayed for fixed income securities in the SECURITIES TRANSFER section which is consistent with performance reporting practices. Please note, in order to avoid any confusion arising from valuation differences and activity attribution of cash and securities transfers immediately following conversion, the Contributions/Withdrawals, Security Transfers and Change in Value will not appear on your statement until January The new CHANGE IN VALUE OVER TIME graph is similar to the former Total Value Comparison bar chart, but appears in both the Consolidated Summary and the Account Summary. As an additional uptick, it also reflects a new feature: Net Invested Capital, which helps you understand how your contributions and withdrawals impact the Change in Value. Please note that because two data points are needed to plot the graph, you will see this graph starting with your second statement. For clients who own Fixed Income securities, Accrued Interest will be included in the overall value of each fixed income line in the BALANCE SHEET (equivalent to the Portfolio Details) and not shown as a separate line item. However, as in the past, the Holdings component (equivalent to the Portfolio Details) will still break out Accrued Interest as a separate figure. There is an option that lets your Financial Advisor set up an account Nickname to distinguish similarly titled accounts (which is particularly significant for relationships with multiple managed or trust accounts). To set this up, speak with your Financial Advisor. Along with the presentation of the accounts' Investment Objectives, which is standard for all new statements, Risk Tolerance will be displayed on statements through July morgan stanley smith barney 2

3 Changed Features Some features that have appeared on your prior statement have changed: On the new statement, Unit Cost represents the inclusive per-unit amount paid for the security and now includes commissions and fees when applicable. As always, both Total Cost and Unit Cost exclude accrued interest on fixed income purchases. Stocks are presented in three categories: common stocks, preferred stocks and options. The presentation of equities with weighting by economic sector is not a feature of the new statement. In the Holdings component, price (e.g., share price for stocks and mutual funds, unit price for fixed income securities) is displayed beneath the security name along with the relevant indicative and referential information such as, Next Dividend Payable Date and Mutual Fund Reinvestment Options. Portfolio CreditLine is now renamed to Margin, and will appear on the BALANCE SHEET portion of statements as part of Liabilities. Additionally, Borrowing Power will no longer appear on statements. As in the past, Debit Card transactions will appear on the client s account statement in chronological order. In accounts where there are multiple cardholders, these transactions will no longer be sorted by individual cardholder. However, this information is still available; and, should you require it, you may obtain it by calling the telephone number on the back of the Debit Card. For retirement accounts, the Required Minimum Distributions and Required Death Distributions are provided quarterly (rather than monthly). If your retirement account contains an annuity, and MSSB is not the custodial owner, the value of your annuity will no longer be included in the calculation of your Required Minimum Distribution. Contact the carrier issuing your annuity to obtain the Required Minimum Distribution based on the actuarial value of your annuity. In most cases, statement edelivery notices are sent and online statements are available on the 4th morning following the last business day (i.e., non-holiday weekday) of the month. For example: Friday, July 29, 2011 was the last business day of the month. In this scenario, the online statement would typically be available on the morning of Tuesday, August 2, morgan stanley smith barney 3

4 Frequently Asked Questions Q. What statements should I expect to receive in the month my account transitions to the new account number? A. In the month of the actual transition, clients will receive: One statement with the new account number showing receipt of the balances and positions from the prior account number and, One statement with the prior account number showing the transfer out of the same balances and positions. In the following months, if there is any subsequent activity in the prior account, clients will continue to receive a statement for the prior account, reflecting that activity. Q. Why do some entries showing receipt of positions reflect a different Market Value than the Market Value when they were delivered off the prior account? A. Market Value is calculated by multiplying Share Price times Quantity. Share prices for the securities presented on your statement are provided by various third-party sources and those sources may use different valuation models for certain securities. Therefore, the Market Value on the new account statement and the prior account statement may differ. However, in neither case do these prices necessarily represent the prices at which those securities could have been bought or sold. Q. I received a statement for my prior account number with no assets. What happened to the assets? A. The assets have been moved to the new account. Clients should first receive a statement for the new account, which will in most cases show the receipt of assets into the new account. This should then be followed by the statement for the prior account number, which will show that the assets have been transferred out. Every effort has been made to ensure that the new account statement is mailed first. However, in some instances, clients may receive a statement for the prior account first. Should this occur, clients can expect to receive the statement for the new account(s) within a few days. Q. Where should I expect to see a dividend or interest payment for a position that was transferred from my prior account to my new account? A. Generally, after positions have transferred to the new account, dividend and interest payments will be paid automatically to the new account. Under certain circumstances (e.g., some stock distributions and dividends on foreign securities), dividend and interest payments will be paid to the prior account and then automatically be swept to the new account. morgan stanley smith barney 4

5 Frequently Asked Questions (continued) Q. On the first page of the Account Summary, there is an empty section on the upper right hand side of the page. Is something missing from the statement? A. No. Nothing is missing from the first statement. As is normal practice, the CHANGE IN VALUE OVER TIME graph never appears on the first statement for a new account. This is because in order to plot the lines on a graph, at least two values are needed for both Market Value and Net Invested Capital. However, with the second statement, clients will begin to see the CHANGE IN VALUE OVER TIME graph (which is similar to the former Total Value Comparison bar chart) in both the Consolidated Summary and Account Summary. As an additional uptick, the graph will reflect a new feature: Net Invested Capital. This will generally represent the net of inflows and outflows to the account. The starting point values are: Market Value: The value of the account at the end of the month that the new account was established. Net Invested Capital: The value of assets when the new account is established, +/- any subsequent contributions/withdrawals during that month. Q. I had difficulty locating certain securities (e.g., Closed End & Exchange Traded Funds) on my new statement. Why is it in a different product group within Holdings? A. The classification of securities into product areas on the new statement may be different than on the prior statement. For example, Closed End and Exchange Traded Funds are displayed under Common Stocks. morgan stanley smith barney 5

6 Appendices Appendix A: Statement Components Below is a mapping of the prior statement to the new MSSB statement. Prior Statement New Statement Highlights in the New Statement Cover Page Change in Value and Current Account Value are displayed though the former will not appear until January Consolidation Summary Consolidated Summary CHANGE IN VALUE OVER TIME graph will appear starting with your second statement. Account Summary Account Summary ALLOCATION OF HOLDINGS pie chart/bar chart is displayed for each account. Portfolio Details Holdings Referential details are provided below each security. Transaction Details Activity Activity for your new account number will be displayed by category. There is an option to display activity chronologically. Required Minimum Distribution Calculation (Retirement Accounts) IRA Activity Summary (Retirement Accounts) Messages Guide to Investment Ratings and/or Consulting Group Status Required Minimum Distribution and Required Death Distribution Page (Retirement Accounts) Historical Contributions & Withdrawals (Retirement Accounts) Retirement Recap (Retirement Accounts) Messages Research Rating Definitions and/or Consulting Group Status Disclosures This new section is available only for Individual Retirement Accounts, and not for ERISA or the former Prototype Retirement Plans. Fewer categories will be displayed. Unspecified contributions will be displayed as deductible contributions. The Retirement Recap section will not be available for the former Prototype Retirement Plans. Displayed once per statement package. Displayed once per statement package. morgan stanley smith barney 6

7 Appendices (continued) Appendix B: Product Categories Below is a list of the product categories that you will see on the new statement. MSSB Holdings Product Categories Category Sub-Categories For Your Information Cash, Deposits and Money Market Funds Cash Deposits Money Market Funds The BALANCE SHEET displays these as one aggregated total. Stocks Common Stocks The Stocks section has discrete sub-categories for Common Stocks, Municipal Bonds Preferred Stocks Options Preferred Stocks and Options. Closed End and Exchange Traded Funds are displayed within the Common Stocks sub-category. Corporate Fixed Income Corporate Bonds Includes International, Mortgage and Asset Backed Securities under Fixed-Rate Capital Securities Corporate Bonds. Other Fixed Income Government Securities Treasury Securities Three new sub-categories under Government Securities. Certificates of Deposit Mutual Funds Federal Agencies Sovereign Securities Morgan Stanley Mutual Funds Other Mutual Funds TRAK 529 and State Tuition Plans Generate quarterly statements only. morgan stanley smith barney 7

8 Appendices (continued) Appendix B: Product Categories Category Sub-Categories For Your Information Unit Investment Trusts Municipal Trusts UITs are broken into four sub-categories. Corporate Trusts Government Trusts Equity Trusts Annuities/Insurance Fixed Rate Annuities Annuities & Insurance are broken into four separate sub-categories. Variable annuities will display sub-account investments. Variable Rate Annuities Other Marquis Annuities Insurance Direct Investments Precious Metals Other Investments Alternative Investments Hedge Funds Enhanced information display. Hedge Funds Unitized Employee Stock Plan Assets Managed Futures Private Equity Real Estate Other Morgan Stanley Smith Barney does not render advice on tax and tax accounting matters to clients. This material was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws Morgan Stanley Smith Barney LLC. Member SIPC. CRC / /11 morgan stanley smith barney 8