GETTING READY FOR THE NEW SUMMARY PROSPECTUS
In another step toward simplifying investor communications, the Securities and Exchange Commission (SEC) is allowing mutual fund firms to adopt a new "summary prospectus" for use as early as March 31, 2009. As of January 1, 2010, every mutual fund statutory prospectus will be required to open with a summary section.
What does this mean for mutual fund firms? For financial advisors? For investors?
Summary prospectus or summary section?
The SEC's new requirements call for mutual fund firms to provide either a separate, printed summary prospectus in conjunction with an online summary and statutory prospectus, or a printed statutory prospectus that begins with a summary section covering the same six topics.
Considering that the effort involved in creating a summary section and a separate summary prospectus is similar, the summary prospectus is far more cost-effective. The chart below shows the estimated print savings afforded by adopting the summary prospectus just for existing investors.
Based on our extensive experience with stakeholder communications, Addison has been a leader in developing concepts for the summary prospectus. Last fall, we presented these approaches to the SEC during its comment period.
Concept 1: Information Design
This concept demonstrates how existing fund information and performance data could be displayed within a new information design that presents this information more appealingly.
Concept 2: Information Design and Plain English Writing
In this concept, content is rewritten in plain English, making it easier for investors to read and understand. The rewritten content flows more smoothly, with management details clearly shown.
Concept 3: Online Presentation
As part of the new summary prospectus regulations, both summary and statutory prospectus information must also be presented online. This is to be done in an interactive format that offers relevant cross-links within and between the summary prospectus and the more detailed statutory prospectus.
Here we see two Web page designs showing informational, navigational and interactive elements. In particular, this design allows readers to customize the charts to help them better understand the underlying data.
Ready to get started? Both in print and online, Addison can help you create a customized summary prospectus that is aligned with your brand and fully compliant with SEC requirements, while setting new standards in clarity and effectiveness.
Download the summary prospectus fact sheet below to learn more.
Summary Prospectus: Challenges and Cost Savings (PDF)
What does this mean for mutual fund firms? For financial advisors? For investors?
- Mutual fund firms will need to summarize today’s typical fund prospectus, often dozens of pages long and filled with charts, graphs, disclosures and caveats, in a clear, plain English format that covers six key topics in a prescribed order.
- Advisors will need to understand the rationale for the change, how to interpret the data presented in the summary prospectus, and where to find supporting details online.
- Investors will need to understand the new summary prospectus and be able to get supporting details online in a user-friendly format as prescribed by the new regulation.
Summary prospectus or summary section?
The SEC's new requirements call for mutual fund firms to provide either a separate, printed summary prospectus in conjunction with an online summary and statutory prospectus, or a printed statutory prospectus that begins with a summary section covering the same six topics.
Considering that the effort involved in creating a summary section and a separate summary prospectus is similar, the summary prospectus is far more cost-effective. The chart below shows the estimated print savings afforded by adopting the summary prospectus just for existing investors.
Based on our extensive experience with stakeholder communications, Addison has been a leader in developing concepts for the summary prospectus. Last fall, we presented these approaches to the SEC during its comment period.
Concept 1: Information Design
This concept demonstrates how existing fund information and performance data could be displayed within a new information design that presents this information more appealingly.
Concept 2: Information Design and Plain English Writing
In this concept, content is rewritten in plain English, making it easier for investors to read and understand. The rewritten content flows more smoothly, with management details clearly shown.
Concept 3: Online Presentation
As part of the new summary prospectus regulations, both summary and statutory prospectus information must also be presented online. This is to be done in an interactive format that offers relevant cross-links within and between the summary prospectus and the more detailed statutory prospectus.
Here we see two Web page designs showing informational, navigational and interactive elements. In particular, this design allows readers to customize the charts to help them better understand the underlying data.
Ready to get started? Both in print and online, Addison can help you create a customized summary prospectus that is aligned with your brand and fully compliant with SEC requirements, while setting new standards in clarity and effectiveness.
Download the summary prospectus fact sheet below to learn more.
Summary Prospectus: Challenges and Cost Savings (PDF)
