Are you drowning under the paperwork related to your U.S. brokerage account? Securities regulations require investment companies to provide a great deal of information to their clients. This transparency is ultimately meant to help the consumer. However, if you are like many people, you toss the paperwork without actually reading it.
Which Papers Are Really Important?
From the perspective of a licensed investment advisor, I must tell you that all paperwork you get is important and you should be sure to read it cover to cover. From a practical standpoint, however, let me suggest the following:
Statements: The most critical document you receive from your brokerage firm is the monthly statement. You are responsible for checking that it’s accurate. For example, if someone stole your debit card and you only notice six months later, the fraudulent charges may not be covered. You should review your account activity at least once a month to make sure all is in order. Additionally, you should keep your monthly account statements in case your accountant needs them to complete your tax returns. It’s fine to electronically save the statements, but make sure they’re backed up.
Yearly summaries and tax reports: These documents help you track your investment progress and see if you’re reaching your savings goals. Even more importantly, they are critical for your year- end taxes (pass them along to your accountant), and will be crucial if you ever face an audit. Save them, too.
Trade confirms: When you enter a trade, you normally get a letter confirming that trade and you should review it upon receipt to make sure it is correct. Better still, you can immediately view trades online, and you should. The trade information is repeated on the monthly statement, so you don’t need to save the original printed confirm once you have your monthly statement.
Other paperwork: Prospectuses, proxies, and various letters. Though you should take a look at them, you probably don’t need to save them. If you have a question, ask your financial advisor.
Paperless is the future
Many firms charge to mail physical statements to their clients, so if you want to save a few dollars, going paperless is fine. Make sure you’re organized and back up the electronic statements.
Your U.S. Brokerage Account or IRA
We deal exclusively with people who live in Israel and have (or want to have) investment accounts in the United States. Get in touch with us now if you have any questions or problems with your accounts and paperwork.
Douglas Goldstein, CFP®️ is the director of Profile Investment Services, Ltd. www.Profile-Financial.com He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.
Published July 20, 2015.