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Of course, the people who descended on Miami for the event, sponsored by my firm, had countless individual interests and concerns. But over the course of all the sessions, security was one of three issues that drew wide interest, making it worth a deeper look (along with custodian-assisted technology and Windows 8 usage).
1. SECURITY UPDATES
One starting point for security is strong passwords — and that, says CFP Bill Winterberg, the founder of planning technology website FPPad and also a regular blogger for Financial Planning, is a numbers game. The longer the password, the less likely it is to be cracked. For maximum protection, Winterberg suggests passwords that are at least 40 characters long. How do you remember multiple long passwords? Use a password manager such as RoboForm, KeePass, LastPass and 1Password.
But there are other, more complicated issues. While many advisors are more focused on external attacks, internal threats are actually more common. These threats can be deliberate hacks by a rogue employee, but they can also be unintentional, as when an employee visits rogue websites or connects an infected device to a corporate network.
Winterberg also warns about ploys hackers use to trick advisors. The techniques vary, but the goal is to get employees to divulge information to hackers. This could take the form of an email message that appears to be from a client requesting that money be wired to a bank account. Or it could be a USB drive with an enticing label dropped in a parking lot that will instantly launch a network attack when plugged into an office computer.
The keys to prevention, Winterberg says, are authentication, verification and a healthy dose of suspicion. All employees need to be educated regularly about threats and be told to verify the identity of anyone who requests information or money movements.
Another growing area is mobile security. Since most advisors now carry smartphones and/or tablets, these devices must be protected. Here are steps that should be taken:
- Establish a password for your device.
- Establish a password for your SIM card (some carriers allow you to do this, but the procedure varies by carrier).
- Create a screen lock that displays your email or phone number so that a good Samaritan can return your device if found. The If Found Lock Screen app for iOS is available for 99 cents. Lockscreen Text for Windows 8 phones is also 99 cents. Contact Owner for Android is free on Google Play.
- Enable location, access restriction and data wipe services like Find My iPhone/iPad and Find My Phone for Windows 8 phones.
- Install only trusted apps.
- Install antivirus software on your mobile devices.
- Use a VPN service when on a public Wi-Fi network. Norton Hotspot Privacy is one solution from a well-known brand.
2. CUSTODIAL SUPPORT
Another big trend was the accelerated development of new custodian-supplied or -assisted technology and custodian-supported integrations.
TD Ameritrade staff members were in Miami to discuss the recently announced cloud version of iRebal. This sophisticated rebalancing software — which will offer deep integration with Veo, TD Ameritrade’s advisor platform for client onboarding, trading and billing — will be free for TD Ameritrade advisors, but its use will be limited to assets custodied at TD Ameritrade. Once it becomes available, iRebal’s cloud version should be a big help for the TD Ameritrade firms that do not currently use intelligent rebalancing software.
In a similar vein, Scottrade announced that its advisors will receive free access to MyVest’s modeling and rebalancing features. This will be deeply integrated with the Scottrade advisor platform, and it will apply exclusively to assets custodied at Scottrade.
According to Chuck Lewis, MyVest’s vice chairman, this solution can monitor portfolio drift at the household level and suggest trades to bring the portfolio back into balance. If advisors approve of the suggestions, the trades can be executed at the touch of a button. For advisors who wish to outsource the investment process, Scottrade will offer managed portfolio services through MyVest, as well.
