Editorial

We're all vulnerable to cyberbreaches

Jan 19, 2014 @ 12:01 am

The Target cybersecurity breach that exposed information on millions of consumers to hackers, and a reported breach at Nordstrom, are new warnings to all who have access to customer or client financial data that they must take all possible steps to protect it.

While most financial planners and investment advisers may feel they are too small to be targeted, hackers are opportunists. If they identify an easy target, no matter how small, they likely will attack it because personal financial data have become valuable to criminals.

Therefore, planners and advisers must first inventory what client financial information they have in their computer systems and who has access to that information. Those with access to the computer systems or client data must be reminded that security begins with them.

Then the companies must review and update their computer security measures consistently to ensure that client data are protected and secure. They also should have backup and recovery systems separate from their main systems so they can recover quickly from a security breach.

Further, they should constantly remind clients to do the same to protect sensitive financial information kept on home computers.

HARD QUESTIONS

They also must ask hard questions of the companies that serve them and their clients: banks, brokers and custodians who have client data on their systems. How often do these companies update their security? How big are their cybersecurity teams? How often do they test their systems? What are the action plans if a breach occurs and client data are compromised?

Advisers must be sure to get detailed and satisfactory answers to these questions. In the words of President Ronald Reagan, trust but verify. There are benefits — and risks — in using smaller, lower-profile service providers or large firms. Either can work, but not without a thorough vetting process.

Clearly, as the wave of cybercrime grows, advisers and those helping them serve their clients must intensify their efforts to protect client data.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Featured video

INTV

Advisers beware: tax law has unintended consequences

Commission accounts could be preferable for some clients, and advisers could be incentivized to move from employee broker-dealers to independent channels.

Recommended Video

Path to growth

Latest news & opinion

State measures to prevent elder financial abuse gaining steam

A growing number of states are looking to pass rules preventing exploitation of seniors.

Morgan Stanley reports a loss of advisers after exiting the protocol for broker recruiting

The firm said it lost 47 brokers in the fourth quarter, the most in any quarter of 2017.

Morgan Stanley's wealth management fees climb to all-time high

Improvement reflect firm's shift of more clients into fee-based accounts priced on asset levels, which boosts results as markets rise.

Legislation would make it harder for investors to sue mutual funds over high fees

A plaintiff would have to state in their initial complaint why fiduciary duty was breached, and then prove the violation with 'clear and convincing evidence.'

Relying on trainees, Merrill Lynch boosts adviser headcount in 2017

Questions remain about long-term effectiveness of wirehouse's move away from recruiting experienced brokers.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print