Securities regulators are advising investors to push their financial advisors to ensure that they are taking cybersecurity precautions.
The North American Securities Administrators Association (NASAA) issued an advisory Wednesday that calls on investors to recognize the importance of understanding how their personal information is being protected by financial firms, and to press firms for more information about their security measures.
“Investors should think about the safety of their financial information, and talk with their investment professionals about what steps firms are taking to safeguard client information,” said William Beatty, president of NASAA and Washington Securities Director.
“The increasing reliance on technology in our daily lives could leave our sensitive financial information more vulnerable to unwanted viewing or theft without proper safeguards in place,” Beatty noted.
Among other things, the advisory calls on investors to question firms about the measures they are taking to address cybersecurity threats and vulnerabilities; to ask whether the firm has written policies, procedures, or training programs in place to safeguard client information; and, whether the firm maintains insurance coverage for cybersecurity incidents.
“As a customer, you have the right to ask these questions and get answers you can understand in writing,” Beatty said. “This is all part of the process of doing your due diligence and becoming an informed investor.”
Last September, NASAA reported that 62% of state-registered advisory firms that participated in a pilot survey had undergone a cybersecurity risk assessment, and 77% had established policies and procedures related to technology or cybersecurity.