Investors Need To Fear Fraudsters More
July 22, 2014 by Karen DeMasters
Investors are not scared enough when it comes to security concerns, according to Steven Crosby, global private banking and wealth management leader for the Americas for PricewaterhouseCoopers.
Rather than being too afraid of cyber thieves and fraudsters, investors are too lax and need to be reminded by their advisors about the dangers that lurk in modern technology, he says.
“A lot of potential fraud is stopped just before it happens, fortunately, but that means the public never hears about them,” Crosby says. In many cases it is the potential victim’s financial advisor who spots the problem.
Crosby says he knows of cases where the advisor has realized the person he is talking to does not know details about the family that he should know. A quick call to the family determines that the person, who is trying to gain access to the family’s accounts, is not who he says he is.
“The relationship manager needs to know his or her clients and their families in order to spot potential illegal activities,” Crosby says. “Everyone knows the problems that can arise with identity theft. Now, think what it would be like if that fraudster drains your 401(k) or your trust.
Advisors need to work with their clients to help them understand security issues and why financial advisors and financial institutions have certain policies in place to prevent security breaches, he says. “We don’t want to scare them but we want them to understand that this is an industry problem.”
To make sure a client is protected, the advisor may need to go to the bank to talk with bank officers about security. They need to determine that a security policy has been developed but also that it is put into practice, Crosby says.
Investors are now demanding information in near-real time and they want access day and night. Only 49 percent of investors with at least $500,000 in investable assets feel their advisors have the proper technology to meet their needs, says PricewaterhouseCoopers.
“But it is more than just access to information, investors should be demanding secure access,” says Crosby.
