Though advisers aren't necessarily cybersecurity experts, they can help prevent clients from becoming victims.
As financial advisers, what role can and should we play in helping our clients avoid Internet fraud? Certainly we must safeguard our internal structures so that private client information is not exposed to unintended parties, meaning we must physically protect client files as well as encrypt or utilize secure portals when emailing sensitive information. When it comes to clients' own internet use, is it appropriate for advisers to get involved?
In my humble opinion, the answer is yes and no. Yes, it is our responsibility to inform our clients to the extent it relates to their financial well-being. No, it is not our responsibility — or within our ability — to advise on technical aspects or hold ourselves out as cybersecurity experts.
Our clients look to us for guidance in achieving their financial goals, and for assistance in keeping them on track. In the area of Internet security, I believe we must educate clients in three areas:
• General information
• Elder abuse
• Current schemes
We include general information on electronic security in all financial plans. In fact, we have a section devoted to password safekeeping and basic warnings related to transmitting personal information. Because this is such an important topic, we frequently incorporate brief articles within our quarterly newsletters. And we are highly communicative about what we do to protect clients' personal information. After all, teaching by example tends to be one of the best educational formats.
Many Internet frauds target the elderly. General education can be helpful here, but I find that it's better to bring up the subject during meetings. I typically start the conversation with "You know, I've been hearing more and more about scammers targeting retired people. Would you be interested in me sharing some of those stories with you?" Notice that I didn't say "elderly" or "old," nor did I say that I was worried they would fall prey. Clients don't want to be classified as old; they also don't want to be viewed as gullible.
Finally, when we are made aware of a current scheme, we should send brief emails to our clients right away. It shows clients that you are on top of things — and saving even one client from becoming a victim is huge. Recent schemes have included fake IRS email notices and Paypal billing update inquiries.
We can't singlehandedly eliminate Internet fraud. However, if we continually educate our clients, we can help them to be more aware.
Sheryl Rowling is chief executive of Total Rebalance Expert and principal at Rowling & Associates. She considers herself a non-techie user of technology.
