The Shift to Electronic Statements: A Growing Trend in the Financial Industry

Financial firms are making a push for electronic statements, but some investors remain hesitant.

The Clock is Ticking

If you’re still receiving paper statements from your financial services company, you may soon find yourself in the minority. Electronic statements are quickly becoming the new standard.

Forced Hands

Vanguard Brokerage Service is one example of a firm that is pushing its customers towards e-delivery. Clients with total qualifying assets under $5 million must enroll in electronic account-related communications by September 1 or face a $25 annual fee.

Mixed Reactions from Investors

While many investors have embraced the convenience of e-delivery, others are reluctant to let go of their trusty paper statements. For years, they have filled their file cabinets with monthly printed reports and enjoy receiving tax forms via traditional mail. Additionally, some investors find comfort in flipping through a printed prospectus or proxy statement, rather than reading it on a screen.

The Comfort of Paper Mailings

“It’s hard for some people to give up the comfort of paper mailings,” says Andrew Crowell, Vice Chairman of Wealth Management at D.A. Davidson, a Los Angeles-based firm.

Addressing Concerns

When financial firms introduce an annual fee for paper delivery, it can often incentivize investors to make the switch. Advisers reassure clients that they will benefit from e-delivery once they become accustomed to it.

Security and Accessibility

“There are several advantages to digital statements,” explains Crowell. “They offer enhanced security in an era of rising financial fraud, and they provide the convenience of searchable archives.” Investors can access old statements from anywhere as long as they can log into their account.

Speed and Efficiency

E-statements also offer the advantage of speed. Investors receive important notifications faster and gain instant access to trade confirmations and tax forms through their financial firm’s secure online portal or mobile app. During tax season, switching to e-delivery can result in fewer delays when filing returns. As soon as your brokerage uploads your tax form on its website, you can scan it immediately, eliminating the need to wait for the paper version to arrive in the mail.

The transition from paper to electronic statements is a growing trend in the financial industry. While some investors may initially resist this change, the benefits of e-delivery, such as enhanced security, convenience, and faster access to important documents, are difficult to ignore. As financial firms continue to encourage this shift, it’s clear that electronic statements are here to stay.

The Benefits and Challenges of E-Delivery

If you’re hesitant about transitioning to e-delivery, it’s advised to take it slow. Start with just one account, give it a few months, and see how it goes. This will help you get accustomed to the cadence of email alerts and learn how to respond to them. Initially, these alerts might appear as spam, but by starting small, you can ease into the transition away from paper statements.

While e-delivery has numerous advantages, it does come with its own set of challenges. One of these challenges is the two-factor authentication process that investors may find daunting or annoying.

Additionally, you might want to consider granting access to your digital accounts to trusted family members or individuals like an executor or trustee in case of emergencies. Having someone you trust with your password can simplify bill payments and financial tracking.

“When creating living trusts or other estate documents, you have the option to include instructions on how to access your digital accounts,” explains Crowell. “By expressly providing permission for a designated executor to access all your electronic accounts, you can streamline the probate process.”

“I’ve spoken to clients who are resistant to switching, and their number one reason is cybersecurity,” says Joe McQuaid, who oversees platform solutions at Concurrent Investment Advisors based in Tampa, Florida. “There’s still a low comfort level” with e-delivery.

Nevertheless, McQuaid encourages these clients to reconsider their stance. By explaining the security features of digital authentication, encryption, and fraud detection tools, he aims to educate them and alleviate their concerns.

“I would argue that e-delivery is actually safer than paper if the company properly invests in cybersecurity and provides transparent explanations of how they protect your data,” adds McQuaid.

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