Why Paperwork Actually Matters with Investments as well as Other Important Matters.
Some people have said my concern about administering investments outside the stock market (or inside as well) is overdone. Everything requires upkeep anyway so why worry about it?
Two good reasons: 1) Many of us are not all that good at filing, cross checking, tracking incoming mail and responding when required. While generally not an overwhelming problem if an investor buys five separate investments over time, even from the same broker dealer, that's a small load of paper that must be dealt with which was not present before. I've talked with dozens of investors who were perplexed and confused about how much they had to be responsible for?
2) Typically, most sales people don't forewarn an investor about their future responsibilities to look out for what they own. When it becomes a real issue, frequently, is when investors are older. Now what had been a pesky bother becomes a very difficult task. Keeping track of each arriving form, making sure it receives an appropriate response can be difficult. Ask anyone whose parents are elderly or having memory problems about who often must stand in to ensure their parents' holdings are secure.
I recently interviewed a CPA who has numerous older taxpayers. This accountant told me a flow of paperwork requiring responses is often a real
headache and often requires assistance. It's a real issue for many.