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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.
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.
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.
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.
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.
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.
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.
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.
Perform regular reviews of your financial statements. Ensure that all transactions are legitimate and report any suspicious activity to your financial institution immediately.
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.
Ensure that your financial advisor is registered with regulatory bodies like the SEC or FINRA. These organizations impose strict cybersecurity standards on financial professionals.
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.
Inquire about the cybersecurity insurance coverage your advisor carries. Adequate insurance demonstrates their commitment to protecting your interests.
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.
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.
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.
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.
Select a custodian with a strong reputation for cybersecurity. Conduct thorough research to ensure they have a track record of protecting client assets.
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.
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.
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.
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. The volatility of indexes could be materially different from that of a client’s portfolio. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. You cannot invest directly in an index.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as “The Dow,” is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* The risk of loss in trading commodities and futures can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition. The high degree of leverage is often obtainable in commodity trading and can work against you as well as for you. The use of leverage can lead to large losses as well as gains.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.
* Consult your financial professional before making any investment decision.
In 15 minutes we can get to know you – your situation, goals and needs – then connect you with an advisor committed to helping you pursue true wealth.
EWA, LLC dba Equilibrium Wealth Advisors, is an SEC-registered investment advisory firm providing investment advisory and financial planning services to clients.
Investments in securities and insurance products are not insured by any state or federal agency.
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*See reference 1 and reference 2 for more information about the above-mentioned statistic.
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In 15 minutes we can get to know you – your situation, goals and needs – then connect you with an advisor committed to helping you pursue true wealth.