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? What if it was your primary checking account? Do you have backups?
Even JP Morgan Chase CEO Jamie Dimon recently admitted that their greatest risk was now “cybersecurity”, basically hacking due to AI. 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.
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Great subject. Another reason to keep paper records is to have evidence of your accounta for heirs. Who can find an account that only exists digitally? Furthermore there are instances where 7 years is not enough. in my divorce I needed records going back before I was married.
This makes a great case for keeping not only a personal copy of financial records (not relying on online versions), but of making a duplicate personal copy. Like Jonathan, I periodically back up my financial records to a USB drive. I keep that drive in a safe deposit box in case something catastrophic happens to my home.
And I keep my most current copy on a RAID 1 external drive at home. It’s not recommended to keep sole copies of documents like financial records and wills in a safe deposit box because accessing that box may be difficult after death.
But I don’t see a case being made for hardcopy records. As noted in the original post, one can always print out a copy from an electronic version. In fact, the idea of having paper copies mailed to a secure location (locked mailbox or PO Box) suggests the opposite. Mailing paper copies or even keeping physical copies increases the risk of theft and hardcopies are not necessary as proof of ownership.
Regarding the seven year retention rule of thumb: one should keep records of asset purchases until they are sold, and then at least another three years (the standard lookback period for tax returns). This is needed for reporting capital gains when those assets are sold. Not only for securities, but for your home, including records of all improvements made.
well it’s just time to go back to putting under the mattress
I always get my account statement in the mail. Call me old but this story is exactly why I get paper.
Wouldn’t your tax documents be proof of you accounts? Do we need to keep track for exactly how much and what we hold in all our accounts?
I do get paper statements in mail for all my important accounts. However, based on my experience that is not suffice. Most of the financial insitituions stopped printing whole account number on the statements, usually just last few digits. When things happen they need full account number to verify. For the important accounts, I keep full account numbers in my password manager in a semi-encrypted manner so that its super handy and make things easier.
I am a little skeptical this proves any specific benefit of actual paper statements.
If I am reading the article correctly, it sounds like she didn’t actually end up showing the physical documents to Fidelity, because she reached the fraud department during a second call on her trip to Vail.
Now, if the fraud department had continued to be unreachable, obviously there’s a scenario where she shows the paper statement to someone and they recognize it as proof of her account. I think there’s also a scenario, where she speaks to a person who recognizes that someone could easily forge a statement and other documents, and she is caught in a loop where everything she produces makes Fidelity more suspicious that she is an expert scammer.
I don’t think there’s any reasonably foolproof way to avoid this scenario or ensure it is resolved (other than the obvious, like program better so glitches don’t occur, or remember the details of every account you opened and how those details might affect your financial providers), but the potentially fatal error was the initial rep who apparently refused to connect her with the fraud department.
This is associated with provider competence. Many/most providers push paperless statements every time one logs in, or at least once a month. When the website looks like it’s 20 years old and/or it hasn’t changed in 20 years, or when it has terrible design flaws — don’t trust them. They are being cheap on site updates and likely cheap with security too.
I keep quarterly/annual paper statements but let the monthly stuff go — it’s just clutter now.
Back in the day I had a Bank of America account. They pushed paperless statements but then charged something like $3 for a paper copy of any prior statement. So, I switched back to paper for free.
Be aware that Citi appears to have an arcane database back end. They’ve had significant IT issues with their website, and these persisted for months and months. This included grossly wrong math for calculating card rewards balances, and most recently, the links to account subpages were dead and clicking locked the website. I had to walk tech support through the rewards math twice before they understood or accepted their error.
Financial stovepipes / split accounts are an excellent safety strategy.