Cybersecurity is a top priority for the vast majority financial advisors, but, troublingly, many advisors do not clearly understand the risks or how to neutralize them.
New research by the Financial Planning Association’s FPA Research and Practice Institute found that only 29% of 1,015 financial advisors it polled this summer considered themselves “fully prepared to manage and mitigate the risks associated with cybersecurity.”
Some 70% of advisor respondents said their clients were at least somewhat aware of the risks associated with data security, yet only 44% of advisors completely agreed that they fully understood cybersecurity issues and risks.
The research showed advisors were also less confident in their overall teams’ readiness to handle cybersecurity issues facing the industry.
Only 36% said their teams fully understood the issues and risks, while 26% said their teams felt confident they could manage and mitigate cybersecurity risks.
“It’s clear from the research that advisors are aware of the risk associated with cybersecurity threats, but they’re not fully confident in their ability to handle the challenges presented or even on how their firms should navigate a path forward,” Dan Skiles, president of Shareholders Service Group and a member of the FPA board of directors, said in a statement.
M&T Bank recently reported high-net-worth individuals are also at risk from cybercrime owing to their own lax security.
State of Preparedness
Firms in the FPA survey had a mixed bag of documented policies and procedures in place to deal with cybersecurity issues:
• Governance and risk assessment: 57%.
• Access rights and controls: 59%.
• Data loss prevention: 58%.
• Training: 51%.
• Vendor management: 43%.