'Heartbleed' cybersecurity threat looms over advisers and clients

Steps, including changing passwords, multi-factor verification, can be taken to lessen threat

Apr 9, 2014 @ 1:04 pm

By Joyce Hanson

Advisers and financial services firms are scrambling this week to avert any potential damage from the “Heartbleed” cybersecurity bug that has recently come to light and threatens millions of web users.

Encrypted channels for online communication that were thought to be secure have now been identified as being at risk due to a flaw in a piece of code in the OpenSSL — an open-source cryptographic library — said Arthur Bierer, chief technology officer at online lead-generation startup Vestorly Inc.

The compromised code is shared by many programs and can be found in many different products, which makes the threat so widespread, said Mr. Bierer, who previously worked on the engineering team at Microsoft and helped implement SSL on Internet Explorer.

“What's happening is that the private keys to the castle can be gotten hold of using this security flaw,” he said. “It allows a hacker to eavesdrop on the communication between clients, the adviser and their financial institutions."

“This is a really bad one,” Mr. Bierer said of the Heartbleed bug.

Mr. Bierer recommended that advisers and clients immediately change their banking passwords and then follow good Internet security guidelines: Passwords should be changed every 90 days, should not be shared and shouldn't be re-used for different websites.

Bill Winterberg, founder of FPPad, a technology consulting firm for financial advisers, agreed with the potential dangers of Heartbleed.

Calling it “bad news,” Mr. Winterberg said anyone who uses Internet services has potential vulnerability to the bug.

He recommended advisers and clients go to the filippo.io Heartbleed test and use the online tool to enter the domain name of any web service used, to identify whether the site is subject to attack.

“Fortunately, more and more providers are securing their services and actively fixing this,” Mr. Winterberg said. “Still, the advice I'm giving my clients is to assume you're affected. Run the filippo.io test, and if the test says there's no more vulnerability, it's fixed. Then change your password.”

He also urged advisers and clients to use multi-factor web verification whenever possible.

Custodians and other financial services firms are testing their platforms to see if they're vulnerable to the Heartbleed bug.

TD Ameritrade Institutional, for example, released a statement saying that TDAI is monitoring the situation and working with business partners to validate that they are secure as well.

“TD Ameritrade's websites and mobile applications do not utilize versions of OpenSSL that are susceptible to the recently announced Heartbleed vulnerability,” the custodian said in its statement.

Roel Schouwenberg, principal security researcher at IT security vendor Kaspersky Lab, warned that any service that has run or is running the vulnerable OpenSSL code suffers a risk of information disclosure.

“The vulnerable code has been out there for two years already, and exploitation of the vulnerability doesn't leave any traces in the logs on the server, making it hard to determine if exploitation ever occurred,” he wrote in an e-mail.

“An attacker could possibly get access to personal identifiable information, user names, passwords, Social Security numbers, financial records and even the cryptographic keys that are responsible for encrypting the network traffic between client and server,” Mr. Schouwenberg said.

0
Comments

What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

May 30

Conference

Adviser Compensation & Staffing Workshop

The InvestmentNews Research team will present exclusive data and highlights from its bellwether benchmarking study that will identify best practices for setting and structuring compensation and benefits packages throughout your... Learn more

Featured video

INTV

Why broker-dealers are on a roll

Deputy editor Bob Hordt and senior columnist Bruce Kelly discuss last year's bounce-back for IBDs.

Latest news & opinion

Things are looking up: IBDs soared in 2017

With revenue up, interest rates rising and regulation easing, IBDs are soaring.

SEC advice rule may give RIAs leg up over broker-dealers

Experts say advisers will be able to point to their role as fiduciaries as a differentiator in the advice market.

Brokers accept proposed SEC rule on who can call themselves an adviser

Some say the rule will clear up investor confusion, but others say the SEC didn't go far enough.

SEC advice rule: Here's what you need to know

We sifted through the nearly 1,000-page proposal and picked out some of the most important points.

Cadaret Grant acquired by private-equity-backed Atria

75-year-old owner Arthur Grant positions the IBD for the 'next 33 years.'

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