“Cybersecurity is one of the biggest concerns my clients have,” says Leon LaBrecque, a managing partner at LJPR. Such statements have only been validated by the string of high profile data breaches throughout the country and is the topic of a recent Financial Adviser article.
According to a recent Securities and Exchange Commission report, most firms reported that they have experienced a cyber incident and “88% of broker-dealers and 74% of RIAs reported they experienced cyber attacks directly or through one or more of their vendors. The majority of the cyber-related incidents involved malware and fraudulent e-mails. 54% of broker-dealers and 43% of advisors received fraudulent e-mails seeking to transfer client funds, and 26% of those broker-dealers reported losses related to fraudulent e-mails of more than $5,000.”
However, Daniel Sibears, executive vice president of regulatory operations and shared services at the Financial Industry Regulatory Authority, argues that the broker community has “done a good job understanding what their vulnerabilities are, and they’ve put in place good incident response plans.” Experts say that on-top of complex layered security defenses, firms must focus on basic employee education as well as public/private collaboration to be aware of active threats.