Despite a recent shift towards online statements, many of us opt to get them the old-fashioned way.

 

When the internet really took off two decades or so ago, and it became possible to receive all your financial information and correspondence via your computer instead of your mailman, many predicted that paper mail would soon be rendered obsolete.

 

Fast forward 20 years, and although corporate offices have become predominantly paperless, financial institutions are still spilling ink in order to communicate with the customers they serve. While these big firms can compel their employees to print out less, they can only gently encourage their customers to “go green” and get their bills and statements digitally.

 

Even the computer literate among us may find it hard to wean ourselves off the hard stuff (that is, hard copies of our financial statements). Maybe Iʼm old school, but I like to get a paper statement for each of my accounts at least once a year. Going completely paperless is not for everyone.

 

Why financial statements are so important

For one thing, they can help you keep track of your finances and provide a useful record for filing your tax return and for general accounting. Remember, there is a difference between personalized account statements and general fact sheets. Sometimes it may take a call to get the information you need.

 

Tip: If you request to receive quarterly account statements in hard copy, you may be more likely to actually read them. Any more frequent than that and you may be inclined to view the mail as a nuisance, akin to junk mail.

 

When I tear open a bill, my eyes gravitate to the bottom line, or wherever the account balance or amount due is displayed. But I also pay attention to the fees that might be hidden there somewhere.

 

So many people pay fees of up to 3 or 4% in expenses on their investment funds for years, because they arenʼt even aware of them or read their statements in a cursory fashion. Or in some cases, the 3-4% doesnʼt impress them as particularly high. But it is! To put it into perspective, an annual fee of just 1% on a $100,000 account balance works out to be $1,000 per year!

 

The fact is that customers who actually read their statements are more likely to spot any fees or charges that were much higher than expected. And with that information in hand, they can take action to prevent or lower those fees in the future.

 

Why paper statements can be more effective.

A 2016 report found that traditional hard-copy statements work better for some people, despite efforts by financial institutions to go digital.1 People seem to value a physical piece of mail as a recordkeeping tool; even computer-savvy types may prefer paper statements. And itʼs because they provide us with a tangible, concrete record of our financial transactions and funds' performance. Compared to the barrage of emails we receive on a daily basis, statements that are actually mailed are more likely to be seen and given due attention.

 

One major East Coast utility found that even among their newest customers (those expected to be more computer-literate), an average of 89% opted to have their bills mailed to them.2 Itʼs easy to understand why, given some of the advantages to paper statements:

 

  • With constant news of data breaches, many people are understandably wary about accessing their financial data online.
  • It can be a hassle locating your statement online and having to remember yet another password.
  • When you view your statement on a tiny smartphone screen or other device, you are potentially more likely to overlook the disclosures that can provide the most critical information.

 

If you do go green, beware of the blind spots

Paperless statements are the future, and not only are they better for the environment, they have clear advantages for consumers, too. We just need to be mindful of their limitations (and those of human behavior).

 

My family and I are conscientious recyclers and we actively try to minimize the amount of paper mail that lands on our doormat. However, when it comes to important financial communications, I would still rather get it in an envelope. The best solution might be a compromise. Go green, but get your quarterly (or annual) reports the old-fashioned way—and make sure you review them carefully.

 

1. “Paper Statements: An Important Consumer Protection,” National Consumer Law Center,

March 2016 http://www.nclc.org/images/pdf/banking_and_payment_systems/paperstatements-

banking-protections.pdf

 

2. U.S. Post Office, Office of Inspector General, “Will the Check Be in the Mail? An

Examination of Paper and Electronic Transactional Mail,” Report Number RARC-WP-15-

006 (Feb. 9, 2015), https://www.uspsoig.gov/sites/default/files/document-libraryfiles/

2015/rarc-wp-15-006_0.pdf.

 

 

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