What is the purpose of sending account statements to clients?

• A. To maintain client engagement
• B. To report their security positions and balances
• C. To advise clients on market trends
• D. To solicit feedback for improvement

Answer: (B)

Sending account statements to clients primarily serves the vital function of reporting their security positions and balances. These statements provide clients with a comprehensive overview of their investment accounts, detailing the current status of their holdings, transaction history, and any accrued income or management fees. This transparency allows clients to assess the performance of their investments and understand their financial positions accurately.

While maintaining client engagement and soliciting feedback are important in client relationships, these activities are secondary to the primary role of account statements. Advising clients on market trends falls outside the typical function of account statements, as those insights would require a proactive communication strategy separate from the regular account updates clients expect. The accurate reporting of clients' financial standings through their statements forms the cornerstone of trust and informed decision-making in the client-advisor relationship.