Financial advisers severely underestimating cyberthreats: experts

The biggest threat to the financial advisory industry might be underestimating the risks posed by a hacker or computer virus, technology security experts say

Sep 20, 2016 @ 9:58 am

By Jeff Benjamin

The biggest technology threat to the financial advisory industry might be underestimating the risk of a technology threat in the form of a determined hacker or illusive virus.

According to a panel of technology security experts speaking Monday in San Diego at the Insider's Forum conference, most financial advisers are oblivious to the technology threats facing their businesses.

“There are nasty, nasty things out there that can mess up your network,” said Steven Ryder, founder and president of True North Networks.

Speaking on a panel ominously titled “Machine to Man: Data Security Threats & Solutions,” Mr. Ryder said a third of all computers are regularly infected with some type of virus or malware.

“Security is not convenient,” he added. “It's not easy having multiple passwords and servers.”

In his pitch to encourage advisory firms to take technology threats more seriously and either hire a full time tech expert or at least contract with an outside firm for regular support, Mr. Ryder said he avoids the use of public wifi whenever possible.

Co-panelist Julian Makas, founding partner of ITEGRIA, also stressed the risks of using public wifi, a message he said advisers should be passing along to their clients.

“Once you're on the network everybody can see your traffic, even if it's password-protected,” he said. “Personal hot spots, however, are much safer because it's a network you can control.”

(More: Advisers reveal cyber insecurities at FPA conference)

Mr. Makas said one way to help reduce the damage of a technology attack or virus is to encourage open and transparent communication with employees that doesn't include the threat of punishment for triggering a technology breach.

“Let your employees know they're not going to get in trouble if they do something that results in a computer virus, because the longer it goes the worse it will get,” he said. “By creating a more open environment, you will usually be able to cut off the damage earlier.”

He cited, as an example, the rash of false apps created during the summer Olympics that were designed to look like ways to easily follow the competitions, but we're actually ways to gain access to information on phones and computers.

(More: Cybersecurity still worries RIAs the most: study)

“There were dozens of false and malicious apps created around the Olympics, and that just shows you that breaches are inevitable,” he said. “But just because they can get in, doesn't mean you want them there for months or years. The hacks used to be for fun and games, but now they've figured out ways to make money off it.”

Dan Skiles, president of Shareholders Services Group, who moderated the session, warned of the tenacity of would-be hackers, that will often find a way into an advisory firm's systems by posing as an existing client in email correspondence.

“Sometimes the hackers will try to keep an email conversation going for a while until they can get you to agree to some kind of wire transfer,” he said. “And sometimes the threat can start with a client,” that has been hacked.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

INTV

Ron Carson: If you aren't growing you're dying

There are two group of advisers, according to Ron Carson: Those that are expanding and those that are just "hanging on." So, which group do you belong to?

Latest news & opinion

LPL rolls back recruiting policy aimed at driving more assets to its corporate RIA

LPL erases $50 million hurdle for new advisers to join so-called hybrid firms.

Don't be fooled by the numbers — the industry is in a dangerously vulnerable state

Last year's stock market gains helped advisers turn in solid growth in assets and revenue, but that growth could disappear in the next market downturn.

Divided we stand: How financial advisers view President Trump

InvestmentNews poll finds 49.2% approve of his performance, while 46.7% disapprove. How has that changed over the course of his presidency?

10 states with the most college student debt

Residents of these states have the most student debt when you consider their job opportunities.

Ex-Wells Fargo brokers sue for damages, claiming they lost business in wake of scandals

In a Finra arbitration complaint, two brokers allege that Wells Fargo's problems damaged their business.

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