While you may think that your retirement assets are sheltered from cyberattacks or identity theft, what about the information you give your financial adviser? How well do they protect you and your money?
“Clients of financial advisers have every right to ask how protected their personal information is.” An easy way to ensure your assets are protected is to ask questions, such as:
- Does the firm have a written information security policy? Clients should ask advisers what practices and policies are employed to protect the client information. “This applies to information on paper-based records as well as electronic records stored on computers and in cloud-based services.” Also ask whether the firm conducts periodic audits of compliance with its information security policies. If so, ask for the most recent month and year when such audit was completed.
- Any physical security threats? Clients should not be able to see any physical records that look like they are left unsecured overnight inside the office. “File cabinets should have locks, and there should be no inboxes or other locations where forms and client paperwork are just left out in the open when nobody is around.”
- Any cybersecurity threats? Inquire about password requirements advisers and their employers use to make it hard for hackers to break into cloud-based services. “[C]lients can ask if their adviser uses multifactor authentication techniques to increase the difficulty of successfully attacking and breaking into online accounts.” Consider asking if the firm conducts periodic risk assessments to identify cybersecurity threats, susceptibilities and potential business consequences.
- Any recent hacking attempts? Find out whether there have been any hacking attempts and whether any were successful. If so, uncover what happened and what the firm has done to increase security measures.
See Robert Powell, Keep Your Retirement Accounts Safe From Cyberattacks, Market Watch, Nov. 17, 2014.