The Investment Company Institute (ICI) outlined the cost savings that would occur if the Securities and Exchange Commission (SEC) would allow funds to deliver documents to shareholders electronically on a default basis.
In a letter to the SEC, ICI officials said e-delivery of shareholder documents would result in potential savings ranging from $589 million to $797 million per year for funds and their shareholders. The projected cumulative savings from transitioning to e-delivery would be $3 billion to $4 billion over five years.
ICI also found that fund investors overwhelmingly prefer to receive electronic delivery and support e-delivery. Specifically, it found that 88 percent of fund investors agreed that “as long as people can still request paper at no cost, it’s a good idea to make e-delivery the default.”
ICI concurs that investors must have the ability to elect paper delivery, or change their delivery elections, at any time.
“ICI’s data finds that — even using conservative estimates — American middle-class investors would save several billion dollars by switching to default e-delivery,” ICI President and CEO Eric Pan said. “Not only is e-delivery cost efficient, investors want it. Our survey shows a vast majority of Americans support an e-delivery default. The SEC should follow the cost data and listen to investors to make e-delivery a reality.”
Further, ICI officials noted that funds delivering electronic documents should not be held to a higher standard than funds delivering paper documents. Once a fund sends an electronic document or notification, the fund’s delivery obligation should be satisfied, consistent with standards for paper delivery.