Smartphone security should be the No. 1 priority for advisers accessing client data on the go

Hacking isn't just on desktops — mobile devices are the new battleground

Aug 5, 2015 @ 12:42 pm

By Alessandra Malito

As the shift to mobile transforms the financial services industry, advisers need to be aware of best-practice methods to ensure smartphone security.

Although data breaches and hacking into enterprise networks and desktop computers have been more publicized lately, advisers who use their smartphones to access client data are also highly at risk — and they may not even know it.

"I don't think people think so much about securing their phones as they should," said Steven Ryder, president of TrueNorth Networks, an IT consulting firm. "More and more people have them, so they are becoming more and more of a target for hackers.

"Security isn't convenient, to have to type a password in on your mobile device, but it is important to do," he added.

There were more than 1.3 million unique smartphone hacks from January to October 2014 — that's a fourfold increase from the year before — according to a Kaspersky Lab report cited in a CNBC article. These hacks were attributed to the fact that smartphone users are using their devices to transfer money.

A Juniper Research report found annual transactions of online, mobile and contactless payments will jump to $4.7 trillion by 2019, up from $2.5 trillion in 2014.

According to another Kaspersky survey, 31% of the smartphones and 41% of the tablets used by respondents are not even PIN- or password-protected. Of those who responded, 28% are not aware of the existence of cyberthreats targeting mobiles, and 26% of those surveyed said they were aware but didn't worry about it.

Even if advisers don't jump on the mobile bandwagon immediately, they still need to be aware that the threat is real. There are a number of ways that advisers can stay safe when using their phones.

For one, Lorraine Ell, president and director of training at Excellat Consulting, a technology firm for advisers, said that it is imperative to be aware of which WiFi connection mobile devices are connecting to whenever an adviser is outside of the office.

"You never really know what WiFi service your phone is accessing," Ms. Ell said. "When you're outside of your office, I recommend you do not tap into a database of clients that may contain sensitive information using your cellphone."

She noted that there is a difference between what types of data advisers are trying to view — if it's just addresses and phone numbers, that's fine, but anything containing Social Security, credit card or bank account numbers could become problematic.

Advisers should also be considering what apps they are installing, and what data these apps are accessing or tracking. Similar to how third-party vendors may have access to adviser information, so too can apps.

“Be aware of who you are giving your information too, just like on any social media site,” said Carlos Simoes, chief technology officer of CircleBlack, a portfolio-analysis program for advisers.

Then there's the simplest — but perhaps most overlooked — of security strategies: having a password, or at least a four-digit PIN, to enable phone access. Mr. Ryder said that advisers can go a step farther by encrypting their phones.

Joel Bruckenstein, co-founder of Technology Tools for Today, an annual financial services technology conference, said that advisers should be proactive and set up a phone or tablet to take advantage of technology available to help in the event that it is lost or stolen.

"Just be aware that a lot of these devices get stolen," Mr. Bruckenstein said.

His suggestion is to use Apple's or Google's services to find a lost phone, or one that lets an adviser remotely lock the missing device or wipe out all information stored on it.

"If there's anything at all on there that has confidential data, when in doubt, just push that button," he said.


What do you think?

View comments

Recommended for you

Sponsored financial news

Upcoming Event

Apr 30


Retirement Income Summit

Join InvestmentNews at the 12th annual Retirement Income Summit - the industry's premier retirement planning conference.Much has changed - and much remains to be learned. Attend and discuss how the future is full of opportunity for ... Learn more

Featured video


When can advisers expect an SEC fiduciary rule proposal and other regs this year?

Managing editor Christina Nelson and senior reporter Mark Schoeff Jr. discuss regulations of consequence to financial advisers in 2018, and their likely timing.

Recommended Video

Path to growth

Latest news & opinion

El-Erian warns advisers on ETF liquidity

If investors decide to exit exchange-traded funds en masse, things could get nasty, economist says.

Pass-through provision in new tax law could benefit REITs, MLPs

Investors in such instruments are eligible for a 20% tax deduction as a result of the pass-through provision.

Fidelity charging new fee on Vanguard assets held in 401(k) plans

The 0.05% fee is ostensibly a response to Vanguard's distribution model, but may also make the company's funds less attractive due to higher cost.

UBS adviser count continues to decline

Firm to merge U.S., global wealth management units on Feb. 1

TD Ameritrade launches all-night trading for ETFs

Twelve funds now can be traded after-hours, but the list will grow, company says.


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 It'll help us continue to serve you.

Yes, show me how to whitelist

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


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print