Hackers are looking for the most efficient way in. Previously, if you put up simple defenses, like basic anti-virus software, cybercriminals would simply move on to an easier target. But today, they are finding backdoors that can simultaneously expose financial advisors as well as their clients.
It’s more important than ever for financial advisors to proactively offer clients their guidance and sound strategy on cybersecurity. According to a 2024 Deloitte survey of wealthy single-family offices, a staggering 57% of North American offices had suffered a cyberattack within the past 24 months.
What’s more troubling is that cybersecurity breaches can easily jump from device to device and account to account, which can pose a special set of risks for financial advisors. When a high-net-worth client is not protecting themselves at home or at work, it can, under some circumstances, expose an advisor’s other accounts.
Nowadays, the client relationship should include trusted advice on improving digital hygiene and instilling a cybersecurity strategy — for the protection of everyone involved.
How Cyber Attacks Are Changing
It’s not only that cyberattacks are on the rise; they are getting more nuanced, too, especially with the advancement of artificial intelligence tools. Scammers are generating AI voices that sound like family members asking for a wire transfer; they are falsifying documents with greater ease; they are exploiting the growth of remote work by infiltrating devices that are used for both work and personal accounts.
For all of these reasons, financial advisors and their high-net-worth clients are at higher risk. Beyond the size of their assets, advisors and wealthy clients tend to have a large online footprint and reputations to protect — including social media accounts, philanthropic activities, and organizational emails — that offer more back doors for cybercriminals.
Easy Steps To Take
Over the course of their meetings with clients, advisors should regularly discuss strategies designed to boost cybersecurity, no matter how big or small a client’s portfolio is. Here are a few key ways to enhance security:
- Audit: The first step in forming a strategy is to look at what’s already in place. Does the client pay for cybersecurity software? Who has access to key accounts? Is there two-factor authentication?
- Password Protocols: Long, unique passwords can feel like a chore. But they are the first line of defense against a cyberattack. Updating your passwords on a regular basis, avoiding duplicate phrases and conventions, and limiting how many people know the passwords will prevent most breaches. You can also recommend a password manager, although make sure there are guaranteed security terms.
- Education: Advisors can send around articles that discuss cyber attacks or protections, offering thought leadership on the latest SIM swap attacks, wire fraud, and phishing scams.
- VPNs: Clients may be reluctant to invest in costly software and protection. One simple solution, however, is to encourage them to use a VPN on every computer connected to their finances. VPNs generally keep the IP address of a computer or mobile device hidden from hackers.
While these tips are preventative steps to take, you may also need assistance in the event that a breach happens.
Our Network
Pilot Financial is proud to partner with LPL Financial, which has an industry-leading track record of providing cybersecurity protections for financial advisors. In addition to prioritizing cybersecurity throughout their platforms, LPL has a dedicated Security Operations Center, along with experts in other areas like Senior Investor Protections, which can help with the detection of threats and provide other support.
Get Prepared Now!
Thanks to our partnership with LPL, Pilot Financial can provide you with a full suite of resources to protect against cybercriminals that could endanger your or your clients’ assets.
Connect with our team to learn more about the services we offer.