Advisor Group Holdings Inc., the parent of Advisor Group, a giant network of 10,000 financial advisors, this month reported a data breach involving private client data, including Social Security numbers, to the state of Massachusetts.
According to the Massachusetts.gov website, on May 8, Advisor Group broker-dealers sent a letter to clients notifying them of the problem, which occurred in December 2021 and resulted from "a systems intrusion in [the] technical environment" of a third-party vendor, R.R. Donnelley & Sons Co.
Advisor Group uses R.R. Donnelley for some of its client mailings, according to the Advisor Group letter. "The personal information that was exfiltrated from [R.R. Donnelley’s] corporate data system included your name, address, and Social Security number," the letter said.
R.R. Donnelley "believes to the best of its knowledge that the intrusion has been removed," according to the letter, and Advisor Group has worked with R.R. Donnelley "to ensure it has implemented proper data protection safeguards to better protect information from subsequent incidents."
Cybersecurity was the top near-term tech concern for independent broker-dealers like Advisor Group, according to the 2020 InvestmentNews Adviser Technology Study, and was cited by 77% of firms that participated.
A year ago, Cetera Financial Group reported a data breach, also involving R.R. Donnelley, that put the Social Security numbers of 2,188 of its clients at risk.
"After the vendor completed its investigation in January 2023, it revised its findings and informed Advisor Group it believed certain clients' personal information was in the compromised data," Clayton Chandler, chief security, privacy and data officer at Advisor Group, wrote in an email Wednesday to InvestmentNews. "After Advisor Group verified the data belonged to its clients, it informed impacted individuals of the situation.
"Consistent with our commitment to data integrity for our financial advisors and their clients, we are continuing to closely monitor our firm's internal systems and working diligently to ensure best practices are followed across all of our vendor relationships," Chandler said.
In April, Advisor Group announced its rebranding and the consolidation of its eight broker-dealers.
"A year ago, if you asked me if there was a future for the small, independent wealth business, I would have replied with an emphatic, 'Yes.' Today, I’m not so certain."
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