Unfortunately, concern about cybersecurity has become commonplace. Electronic safety is rightfully on everyone’s minds.
Almost two-thirds of consumers worry about the data security practices of companies to which they provide personal and financial information.
Think about it. If your clients and prospects worry about shopping at major retailers, how do you think some may feel about giving their hard-earned dollars to a financial professional, who manages millions, if not billions, of dollars every day? While they may not be telling you, it is likely they worry your firm could be considered a prime target for cyber hacking, whether you work for a large firm or are a sole proprietor.
Who Initiates the Conversation?
So how do you handle the topic with your clients and prospects? Who initiates this important conversation? Do you wait for them to bring the topic up or do you address the topic of electronic safety head on? The latter is likely your best approach. This conversation should be just as important as other conversations you have with your clients, as well as prospects.
Research from the Financial Planning Association’s Research and Practice Institute shows that even though 80 percent of advisors say cybersecurity is a high priority for them, only 29 percent agree they are fully prepared to manage and mitigate the risks associated with cybersecurity.
Do you feel prepared and as though you fully understand the issues, as well as the risks, that are associated with cybersecurity?
While there are certainly regulatory fines for a lack of cybersecurity policies and procedures, any kind of cyber breach can be detrimental to your firm, the trust of your clients and prospects, not to mention extremely expensive.
As an advisor, you may have “errors and omissions” insurance to cover different forms of liability. Most of these policies, however, do not cover any form of cyber breaches.
As a result, more and more advisors are opting to purchase a cybersecurity rider on their errors and omissions policy to help cover items such as regulatory fines, lawsuits, credit monitoring and other expenses associated with a cybersecurity attack.
Clients and prospects entrust you with a lot of personal and financial information, not to mention their hard earned money. It’s extremely important to be strong protectors of their private information and their assets. Considering adding cybersecurity to your policy is a sound investment for both your clients and your practice. MORE