Helping hack attack victims an opportunity for advisers to boost trust

In the world of financial advice, the massive breach of credit card data at Home Depot last week was a bigger deal than the hacking of celebrities’ private photos, but both events resound with clients and make them worry about their susceptibility to such fraud.

Many advisers help clients after their credit and other information has been compromised — including some who assisted with identity fraud problems resulting from last year’s mass data breaches at Target and Neiman Marcus Group.

While the services aren’t typical advisory offerings, financial professionals who support clients during such unsettling events are building enduring bonds with them.

“Helping with credit issues is a real value-add for our clients in their time of need,” said Jim Holtzman, adviser and shareholder at Legend Financial Advisors in Pittsburgh. “Like a death in the family, this is the kind of event where you can really step in and help.”

When clients are notified that their credit or other banking information has been compromised, “they call us, and at that point they’re totally freaked out,” Mr. Holtzman said.

His firm instructs clients to call their banks and brokerage to inform them of the situation so extra eyes are looking for transfer requests or other suspicious activity on the account. The next call is to the credit monitoring agency. They then need to pull credit reports to find out if any damage already has occurred.

Sometimes clients are too upset to do this themselves, Mr. Holtzman said, so an adviser conferences into the call and helps the client through it. Advisers typically can’t do everything, because they can’t make changes to client accounts with banks and other financial services companies.

Research suggests that clients have legitimate reason to worrywhen they hear a major retailer such as Home Depot announce that it may have been hacked. About one in three people caught up in a data breach last year experienced identity fraud later, according to a February 2014 report by Javelin Strategy & Research.

Home Depot has hired a number of data-security firms to help ascertain whether client data were stolen. It was alerted to a problem last Tuesday, when a cybercrime blog reported that the Atlanta-based company may have been the source of a large batch of credit and debit cards that recently had been offered for sale on the black market.

Executives of the company said last week that they’ll offer free credit monitoring and identity protection services to all customers potentially hurt by the suspected data breach.

At Valeo Financial Advisors in Indianapolis, clients usually call after they’ve received a credit warning from a retailer.

Their first question is “Should I worry?” said Gregory Fulk, an adviser and Valeo’s chief operating officer. “We tell them this is a time for extra vigilance. If circumstances warrant, we help them change their credit cards and, in some cases, bank or brokerage account numbers.”

Valeo provides assistance with such credit matters as part of its comprehensive services. “We feel like we’re a trusted partner to clients in all aspects of their financial life,” Mr. Fulk said.

Erin Botsford, chief executive of The Botsford Group, in Frisco, Texas, brought in an expert a few years ago to speak to clients about protecting themselves against identity theft.

John Sileo, an expert in privacy and data theft, tells clients stories about the challenges people have faced when their credit and debit data are stolen and thieves use that information to open accounts and apply for loans — essentially ruining the person’s credit.

“The concern is not just about losing money but getting your credit back,” which is a long and expensive process, Ms. Botsford said.

Katie Moore, a financial counselor at the nonprofit GreenPath Debt Solutions in Farmington Hills, Mich., said anyone suspecting account information has been tampered with should be on the lookout for mail about accounts they don’t remember opening, and for collection notices or calls.

“Banks have processes in place to resolve problems, but you have to be aware of it,” Ms. Moore said, adding that everyone should review their credit report at least once a year and address anything that doesn’t look right.

“This is something that we’re all worried about, and it creates a lot of angst,” she said. “If it happens, the good news is that you’re probably not going to be out a lot of money, but it will take time to clear up.”