The first important document an American citizen receives is his or her birth certificate. Then comes a Social Security card, followed by diplomas.
Eventually, citizens work their way up to documents that cover necessary financial needs like insurance and property ownership. When citizens become investors, documentation goes through the roof: every important purchase includes paperwork that must be protected in order to prove and maintain ownership.
Paperwork begins to pile up, and that shoebox under your bed no longer suffices as a place to secure important documents. So, you obtain a lockbox of some sort, until you finally realize you need something more official and protected and you lease a safe deposit box. Eventually, when your paperwork or possessions require it, you acquire space within a vault.
But a surprising percentage of investors do not keep important documents anywhere other than that secure steel box at home, according to a survey of investors by Spectrem.
Forty-six percent of all investors have an in-home safe, while 34 percent rent a safe deposit box at their bank. Thirteen percent of investors, with a minimum net worth of $100,000 not including the value of their primary residence, have no secure “home’’ for their important documents.
And apparently, few financial advisors offer direction in regard to safekeeping of documentation. Only 13 percent of investors have ever discussed document safekeeping with their advisor, only 19 percent of investors say their financial provider offers a safe deposit box and only 8 percent offer space within a vault.
There is another possibility for document safekeeping in recent years in a form of a digital vault, in which electronic copies of documents are stored in the digital “cloud” and maintained by financial providers, banks and other financial institutions. However only 8 percent of investors say their advisor has suggested keeping important documents in a digital vault, and interest in such a protection is minimal (33.58 on a 0-to-100 scale among all investors). Surprisingly, interest in a digital vault is similar among young investors and old.
As bank branches continue to disappear in favor of online banking services, so too do safe deposit boxes disappear. If only one-third of investors rent a safe deposit box, two-thirds are keeping their documents and valuables somewhere else. Only 11 percent of investors make use of a vault at their bank.
The kinds of documentation investors keep in a safe deposit box include a copy of a last will and testament (29 percent), birth certificates (27 percent) and deeds and titles to property (25 percent). Fifteen percent keep their Social Security card in a safe deposit box and 14 percent keep their passport in that secure location.
Top Takeaways for Advisors
If your provider offers document safekeeping, either in a physical manner like a safe deposit box or vault, or in a digitized way such as a digital vault, let your investors know. While some important documents require frequent perusal (passport or Social Security card), others can be put away for safekeeping for a long time.
Safe deposit boxes are also a great way to protect family heirlooms, which can be damaged in home accidents or stolen in case of burglary. The added security may prove to be a key selling point in maintaining a relationship with a careful investor.
©2018 Spectrem Group