Financial advice, like any other business, is not immune to the march of technological progress. Unlike some other sectors, however, IFAs have to deal with sensitive and confidential information and they need to keep it secure.
Cybercrime is a growing threat, and the perpetrators are increasingly out to steal funds, so it is vital that IFAs take steps to protect both themselves and their clients.
Data is at the heart of things, and it is vital to know where it is stored and how it is protected. There is a growing trend toward storing information in the cloud, and it is important to know where the actual servers are located and what steps are in place to protect the data both at rest and in transit, such as encryption.
Good data handling practices are also important. If advisers are taking data home to work on, laptops and flash drives need to be encrypted, too. There is no point in making the central database safe but allowing information to be exposed elsewhere.
Communicating by email is commonplace today, but it is a method that is vulnerable to targeting by cybercriminals. Advisers need to use email, but they should take steps to ensure that they don’t share too much. If confidential information has to be exchanged electronically, it should be done using a secure file transfer service or simply by notifying the client that a document is available to access via a portal.
Mechanisms should also be in place for dealing with end-of-life data. When a client ends their relationship with an adviser, their information needs to be disposed of safely. Measures need to be in place to control access when employees leave the company, too.
How much detail?
Typically, back office systems for IFAs from suppliers such as https://www.intelliflo.com/ will require a certain level of information about the client in order to work. However, there is a fine balance to be struck between collecting enough information to serve the client’s needs and holding data just for the sake of it.
Consider how much information is actually needed and hold only that amount, but also take steps to keep the information up-to-date. Checking regularly with clients that their data is current is key to avoiding errors in communication and keeping marketing and other messages relevant.