A Cautionary Tale about Maintaining Paper/Offline Records of your Accounts

The NY Times recently published the article “Her Life Savings Mysteriously Disappeared After a Systems Glitch” (gift link), where a woman logs into her Fidelity account one day and finds that her accounts are missing online and Fidelity dismisses her as crazy:

Fidelity Investments sent messages alerting her that her phone number and email address had been removed from her profile — and to contact Fidelity if she hadn’t done it. Alarmed, she quickly logged in, “only to find that all of my accounts had disappeared and my balance showed zero dollars.”

[…] Now in full panic mode, she called Fidelity on her way into her clinic; it told her that she didn’t have any accounts there.

“Are you sure you shouldn’t be calling Schwab?” Ms. Gruntmane recalled one representative saying, referring to Charles Schwab. “Are you sure it’s with us?”

Even if her account was closed or deleted, the reps told her, they could usually see that. They also refused to connect her with the fraud department, Ms. Gruntmane recalled, for the same reason — if there wasn’t any trace of her accounts, how could there be a fraud?

I recommend reading the entire article for the details, but in the end she was able to regain control of her accounts because she was able to provide an account number. Fidelity claims there was an uncommon technical glitch due to her opening some accounts with a Individual Taxpayer Identification Number (ITIN) and others with her Social Security number.

The most important takeaway:

From here on in, she said, she’s going to be sure to keep physical evidence of her accounts and balances in a secure place. Her tale serves as a reminder that we all should adopt that habit.

Every time I say it, I know I sound like an old man, but I still like receiving paper statements in the mail for my important accounts. I either use a locked mailbox and/or a PO Box, and this way, even if something happens to me, my wife will be notified by paper statements about overdue bills and major accounts. I also download online versions periodically and store them on an external USB drive, making sure I have a complete collection at the end of each year. For some accounts, I might just print out a year-end statement.

However, I’m sure many folks just assume that the online statements will always be available, as they usually promise to store them for 7 years to whatnot when they repeatedly bug you to go “eco-friendly”. Consider what would happen today if this “uncommon” glitch happened to you. Do you know all your account numbers?

Even JP Morgan Chase CEO Jamie Dimon recently admitted that their greatest risk was now “cybersecurity”, basically hacking due to AI. Recall that the “Godfather of AI” Geoffrey Hinton himself divides his assets across multiple banks and brokerages due to the risk of theft due to AI. I agree that it’s only a matter of time before a big hack occurs to one brokerage or another. Splitting your assets and maintaining a historical physical record of your asset ownership won’t solve every potential problem, but they are both precautions that I am taking.