Investors and retirees who now get lengthy paper reports on how their mutual funds and other investment funds are doing will have to go online for the same updates. The new move by a Washington regulator is frustrating consumer watchdogs.

On Monday, the Securities and Exchange Commission voted to allow investment firms to stop creating and mailing paper fund reports to investors. Instead, financial firms could post digital copies of the reports electronically on the Internet as the default way of updating investors on how their funds are doing. These reports sometimes sprawl more than 100 pages.

The SEC said in a statement that the push to go paperless seeks to "improve the experience" of investors.

The new rule kicks in on Jan. 1, 2021. When it goes into effect, investors could tell their financial firm they would like to have the option to keep receiving paper copies of reports at any time, free of charge.

But the burden will fall to the investor to notify financial firms of their preference. Investors will receive a short, paper document in the mail, notifying them that their digital report is ready for viewing online.

Critics of the SEC's move warn that it could mean fewer investors checking in on how their mutual funds are doing.

And SEC Commissioner Robert Jackson Jr. said the decision goes against what the commission knows about investor behavior. He was the sole "no" on the 4-1 vote to go paperless.

"The commission today reverses the default rule for delivery of information to investors, a choice contrary to everything we know about how individual investors actually behave," he said, according to The Wall Street Journal.

SEC Public Affairs Director John Nester declined to comment on the vote, but pointed to the commissioners' statements about why they voted the way they did.

"While Washington has spent its time logrolling, these documents have continued to languish on doorsteps and recycling bins in homes all across the country where their investor recipients read news online, bank online, and shop online," said SEC Commissioner Michael Piwowar, explaining why he voted in favor of the rule.

The vote comes from a commission project, in the works for the past two years, that seeks to modernize the delivery of regular, sometimes lengthy reports that cost the industry an estimated $300 million per year. That cost then trickles down to shareholders.

Barbara Roper, director of investor protection at the Consumer Federation of America, said the savings on getting rid of paper disclosure deliveries is "quite literally pocket change." She warned that the cost savings would not be passed to investors.

But she's even more concerned that the SEC is not acting in investors' best interests.

"This will make it more difficult for those investors to continue to get their disclosure documents in their preferred format," Roper said. "Why doesn't investor preference matter?"

In a 2016 survey by the Financial Industry Regulatory Authority, a self-regulatory body, 49 percent of investors said they preferred paper investment reports; 33 percent said they preferred a digital copy. The rest said they would prefer to find out how their funds are doing via meetings with their brokers or advisers.

The move to abandon paper was not an easy one. The American Forest & Paper Association and the Envelope Manufacturers Association lobbied against the decision, delaying the SEC's vote back in 2016.

While the effort is a done deal already, the SEC is trying to collect direct feedback from investors on how to fine-tune the delivery of the new digital reports. The open call for public comment closes Oct. 31.

Charlotte Norsworthy is an intern on NPR's Business Desk.

Copyright 2021 NPR. To see more, visit https://www.npr.org.