Artificial intelligence has transformed how we live, work, and communicate, but it’s also transformed how fraudsters operate.
Every week, the headlines remind us that cybercriminals are using AI not just to attack systems, but to convincingly impersonate real people and increasingly, those people are our clients.
In financial services, trust isn’t just part of our business, it is the business. And protecting that trust now requires a whole new level of vigilance because while AI is bringing extraordinary opportunities, it’s also making it harder than ever to distinguish between legitimate users and bad actors.
That means we, as advisors, must evolve our cybersecurity approach just as rapidly to keep up with the dramatic rate of AI development.
Before even considering the malicious uses of AI, we have to acknowledge that well-intentioned people, including advisors, can accidentally create vulnerabilities.
There are countless AI tools that promise efficiency, content generation, even help analyzing data, but not all of them are secure. Some systems take the information you upload and use it to train their models, meaning private client data could end up in environments we don’t control.
We’ve taken a clear stance on this with strict rules about which AI tools are approved for use, how client information must be handled, and what security measures those systems must have.
We thoroughly vet providers with sandboxing and data protection policies before anyone is allowed to use them in even the smallest way.
It’s far too easy to adopt a flashy new tool and only later realize that six months’ worth of sensitive information has been feeding an unknown machine learning system. We refuse to let innovation outpace protection.
On the defensive front, we partner with cybersecurity experts who ensure our systems are hardened to modern attack methods with 24/7 threat monitoring.
AI now enables hackers to automate firewall assaults and sift through stolen data with terrifying speed, so we stay on the cutting edge of defense with constant updates, proactive monitoring, and every layer of security available to us.
However, the biggest vulnerability seldom lies with us, but with the people we serve.
The most likely scenario isn’t a hacker breaking into a custodian and draining accounts directly, although that risk is never zero.
It’s more likely that someone will use stolen personal information to impersonate a client or manipulate them into authorizing a fraudulent transaction. AI-driven voice cloning and phishing techniques are becoming so convincing that even highly aware clients, and advisors, can be fooled.
So we’ve redesigned our processes around protection.
Clients can’t simply log in and move large sums of money without our involvement. Transfer features are hidden by default and we require verbal confirmation for new requests, even seemingly small things like changing a phone number or email address, because those are exactly the first steps bad actors take.
Earlier this year, we received a call from what sounded like one of our clients requesting a financial transfer. The voice was shockingly accurate and even the real client later told us he wouldn’t have known the difference. But our advisor team knew the client was traveling abroad and caught a subtle mispronunciation of his own name. That policy, combined with our callback requirement, prevented what could have been a devastating theft.
That was our wake-up moment. Attackers now have tools that can mimic identity flawlessly so we needed a defense that only a human truly has, personal knowledge.
We began implementing client-specific passphrases which are something private, not publicly posted, and not guessable through data scraped online. We help clients choose wisely and remind them that if it appears on social media, it’s not safe to use. Even with a perfect impersonation, the missing passphrase stops the fraud cold.
The danger doesn’t only come from criminals. Sometimes clients unintentionally expose themselves by using AI without realizing how it handles their data.
We’ve heard statements like:
“I uploaded my tax return to a chatbot to see if I missed anything.”
It’s an innocent attempt at getting help, but a frightening security breach. Many people aren’t digital natives. They don’t instinctively see the risk, because they don’t know what they don’t know.
We take an education-first approach. We host cybersecurity workshops, record video guides, send alerts after major breaches like the Equifax hack, and provide step-by-step instructions on how to lock down identity and credit files.
We’ve partnered with identity-protection services to monitor client credit reports and alert them early if signs of trouble appear.
The message is that if you wouldn’t share your most sensitive information with a stranger you just met, you shouldn’t share it with an AI system you don’t fully understand.
We also have to manage risk from within the firm. Younger advisors, excited to leverage new tools, might unintentionally put compliance or client confidentiality at risk.
We allow AI for drafting general language as long as it contains no identifiable information and the results are carefully reviewed, but we are crystal clear that AI-generated financial guidance can never be assumed correct. These systems are known to hallucinate. Confidence is not credibility.
It’s not a new risk; we’ve all seen people copy Google’s top result without verifying it. But AI speaks with a kind of authority that can be dangerously persuasive.
So we train. We monitor. We reinforce. Innovation should serve our clients, not endanger them.
AI isn’t going away. It will only become more sophisticated, more accessible, and more deeply woven into everyday life. Bad actors benefit from the same efficiencies we do and they move fast.
Our responsibility is to stay one step ahead, protecting our clients’ wealth, identities, and peace of mind. Cybersecurity is not just a technology issue, it’s a human one, and it’s now a core part of what it means to be a financial advisor.
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