Financial advisors wear many chapeaus, and increasingly being a cyber watchdog for clients is one of them. Granted, many (most?) advisors aren’t techies, particularly the older ones. But they can help protect their clients against fraud and cyber threats by providing common sense guidance on navigating internet-based communication.
Some of the major fraud “vectors” include email and phone scams, along with file sharing and thumb drives, said David Jacobs, a fee-only financial planner at Pathfinder Financial Services LLC in Kailua, Hawaii, who formerly had a 20-year career in computer security and artificial intelligence. He spoke this week during a session at the National Association of Personal Financial Advisors’ Spring National Conference in Austin, Texas.
Some of the advice he dispensed seemed simple enough, if not intuitive considering how long the internet has been an integral part of our lives. But based on some of the war stories shared by advisors in the audience, it’s evident that many consumers (read: clients) still don’t exercise prudence while navigating the web and potentially set themselves up to be victims of financial malfeasance.
The stakes are high, as fraudsters seek direct payments from gullible people, aim to collect their personal information, or gain control over their personal computers and their online accounts, Jacobs said.
Financial advisors, he noted, can help steer their clients away from these nefarious schemes by making them aware of potential scams and/or being a sounding board if a client has questions about the legitimacy of a particular phone or email notice from a third party.
Jacobs laid out some the most common email scams including malware, spyware, ransomeware, botware (hijacking your computer to attack other computers), phishing schemes and bogus invoices for products or services an individual didn’t order.
He noted that people should never open file attachments sent via email from people they don’t know.
“The best defense is obviously to not open attachments,” Jacobs said. “I challenge all advisors to stop sending attachments to your clients. Everyone at this point should have some other kind of file-sharing service for their clients. You don’t want to train your clients to share files via email.”
He mentioned various legitimate file-sharing services such as Google Drive and Dropbox.
Jacobs said that your email account is the most important account to keep secure. “That’s the key to the kingdom these days for all of your online activities,” he explained. “If you have control of somebody’s email, you can pretty much reset the passwords for just about every account they have.”