December 27, 2023

Protecting Your Finances: A Comprehensive Guide to Cybersecurity

In today’s digital age, cybersecurity is a topic that should be at the forefront of everyone’s mind, especially when it comes to safeguarding your finances. In this comprehensive guide, we will break down three essential aspects of cybersecurity: what you can do as an individual, how to choose a trustworthy financial advisor, and the importance of a reliable custodian for your assets.

1. Protecting Yourself Proactively

Before delving into the role of financial advisors and custodians, it’s crucial to understand what you, as an individual, can do to proactively protect your financial information and assets. Cyber threats are becoming increasingly common, and taking steps to secure your personal information is essential.

  • Avoid Public Wi-Fi

One of the simplest yet often overlooked steps is to avoid using public Wi-Fi networks for sensitive tasks like accessing financial accounts. Public Wi-Fi networks can be vulnerable to cyberattacks, making it easier for hackers to intercept your data. If you must use public Wi-Fi, avoid accessing personal accounts, and consider turning your phone into a personal hotspot for a more secure connection.

  • Implement Two-Factor Authentication (2FA)

Two-factor authentication (2FA) adds an extra layer of security to your online accounts. Whenever possible, enable 2FA for your financial accounts. This way, even if someone has your password, they won’t be able to access your accounts without the second authentication step, often sent via text message or email.

  • Protect Your Email

Your email account can be a goldmine for cybercriminals looking to access your financial information. Ensure your email password is unique and not shared across multiple accounts. Consider using dual authentication for added security.

  • Educate Yourself

Cyber threats, including deepfakes and phishing scams, are on the rise. Stay informed about the latest cybersecurity risks and trends. The more you know, the better equipped you’ll be to protect yourself.

  • Invest in Cybersecurity Services

Consider investing in cybersecurity services such as identity theft protection and monitoring. Services like LifeLock can help you detect and respond to potential threats, providing peace of mind.

  • Scrub Your Online Presence

Regularly review and remove personal information from the internet. Services like DeleteMe can help erase your digital footprint and reduce the amount of personal information available online.

  • Review Your Financial Statements

Perform regular reviews of your financial statements. Ensure that all transactions are legitimate and report any suspicious activity to your financial institution immediately.

2. Working with a Financial Advisor

If you decide to work with a financial advisor, it’s essential to choose a team that values cybersecurity and takes measures to protect your financial information.

  • Regulatory Compliance

Ensure that your financial advisor is registered with regulatory bodies like the SEC or FINRA. These organizations impose strict cybersecurity standards on financial professionals.

  • Data Storage and Access

Ask your advisor about where they store your information and who has access to it. Verify that they use secure cloud-based databases for data storage.

  • Insurance Coverage

Inquire about the cybersecurity insurance coverage your advisor carries. Adequate insurance demonstrates their commitment to protecting your interests.

  • IT Support

Ensure your advisor has a competent IT team responsible for managing and securing their systems. In the event of a breach, having experts on hand is crucial.

  • Secure Communication

Discuss how your advisor communicates with you and shares documents. A secure portal or encrypted messaging system should be in place to protect sensitive information.

  • Client Verification

Your advisor should have strict client verification procedures in place. Any requests for money movement or changes to your accounts should undergo thorough authentication processes.

3. The Role of a Custodian

Perhaps the most critical aspect of safeguarding your assets is choosing the right custodian. Custodians play a vital role in ensuring the security of your investments.

  • Custodian Selection

Select a custodian with a strong reputation for cybersecurity. Conduct thorough research to ensure they have a track record of protecting client assets.

  • Insurance Protection

Verify that your custodian has appropriate insurance coverage. Fidelity, for example, offers SIPC insurance up to $500,000 and additional coverage for cash and securities, providing peace of mind for clients. They also insure up to 1.9M of cash and up to 1 Billion of securities for each client.

  • Cybersecurity Measures

Learn about the cybersecurity measures implemented by your custodian. Fidelity, as an example, employs multifaceted authentication, real-time account alerts, and voice identification to enhance security.

  • Responsive Procedures

Understand your custodian’s procedures in case of a cybersecurity incident. A responsive and proactive approach to breaches is crucial to minimizing potential damage.

In conclusion, cybersecurity is a critical consideration in today’s digital world, particularly when it comes to your finances. By taking proactive steps to protect yourself, choosing a knowledgeable financial advisor, and selecting a trustworthy custodian, you can significantly reduce the risk of falling victim to cyber threats. Remember, cybersecurity is an ongoing process, and staying informed and vigilant is your best defense against the ever-evolving landscape of cybercrime.


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Important Disclosures:

Securities and advisory services offered through EWA LLC dba Equilibrium Wealth Advisors (a SEC Registered Investment Advisor).
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.
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