It’s a scary thought, but you (and your clients) can assume personal financial data has been compromised in some fashion and could be used for fraudulent purposes.

“We’re going to be in an environment where everything is compromised,” said Tim Keninger, TD Ameritrade’s director of security risk management during the firm’s Elite Linc advisor conference in Laguna Niguel, Calif.

“Even if we don’t have a breach [at TD], they’re taking your clients’ data and trying to open a new account [elsewhere] and trying to [transfer] assets to a different firm,” he said.  “It’s pretty easy to put two and two together and say that [clients’] data is out there.” 

That all data is compromised—“that’s a devastating fact,” said Baratunde Thurston, a futurist and activist who writes about the impacts of big tech vacuuming up online data.

“There’s a dossier being constructed on all of us, and we’re not in on it,” Thurston said during a freewheeling panel discussion Wednesday on emerging technologies and privacy.

That means fraudsters have potential access to enough data on clients to open fake accounts. In fact, new-account fraud is the No. 1 problem in terms of volume that TD sees, Keninger said.

The firm has begun to see crooks set up transfers to new accounts and then route the client-validation calls advisors make to the crooks’ own numbers, he said. The firm has been seeing this within the last month with retail accounts and expects to see advisors' clients hit as well.

But Keninger said the industry is getting better in responding. “We’ve got better profiles and information on the bad guys. … We are using multiple vendors to go out and find things like device print information, phone print information [and] anything we can use to be proactive and build up surveillance channels before anything can happen.”

What’s more, all the big banks and brokers work together to share fraud information, he said. “So if something bad is happening at another firm, I’m going to get that device-print information or some other pertinent information where I can build a channel to help protect our clients as well.”