Don’t Neglect Your Mutual Fund!

This probably belongs in the “I didn’t know that!” file, which is why I created “Financial Literacy” as a new blog category.

Attention mutual fund shareholders: if you fail to maintain contact with the fund company then a state may consider you lost and claim your assets under certain conditions.

In general, this may occur in two ways. First-class mail sent to the shareholder and returned as “undeliverable” is one. The second way is to have no contact with the fund company for a given period of time. Specific details vary by state.

“No contact” means the shareholder does not contact the fund company every 3-7 years regarding the account. Automated features like investments and redemptions do not necessarily qualify as “contact.”

The SEC requires mutual fund companies to use at least two national databases to find a valid address, but the responsibility of maintaining updated contact information ultimately lies with the investor. To be safe, contact all financial institutions you deal with annually to confirm contact and beneficiary information. This may include banks, brokerage firms, credit unions, etc. Cashing all dividend checks and reviewing mail sent from financial institutions would also be prudent.

For more details, I refer you to “Frequently Asked Questions About Lost Property” at www.ici.org.

Disclaimer: in no way does this article about mutual funds suggest that I would recommend one for anybody.