Most American financial advisors believe cybersecurity is important, but a significant proportion of them lack a clear understanding of the risks and how they can neutralize those risks, according to research released Friday by TD Ameritrade Institutional at the Financial Planners Association (FPA) annual conference in Baltimore.
And there is no reason to believe the situation is different in Canada, say those who conducted and presented the research.
“Cybersecurity is an issue that advisory firms are grappling with regardless of their size, and advisors have no margin of error when it comes to properly protecting their clients’ personal information,” said Dan Skiles, president of Shareholders Service Group and a member of the FPA board of directors at a press conference Friday morning. “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.”
The research, entitled “Is Your Data Safe? The 2016 Financial Advisor Cybersecurity Assessment,” found that 70% of advisors say their clients are at least somewhat aware of the risks associated with data security. But fewer than half (44%) of advisors agree that they fully understand the issues and cybersecurity risks. Only 29% of advisors feel that they are “fully prepared to manage and mitigate the risks associated with cybersecurity.”
The research was conducted for TD Ameritrade and the FPA by Toronto-based AbsoluteEngagement.com. Both Julie Littlechild, founder of Absolute Engagementand, and Bryan Baas, managing director of risk oversight control at TD Ameritrade and co-presenter of the research, said they had no reason to doubt the survey would yield similar results among Canadian advisors.
“The only difference might be in the regulatory requirements,” Baas said.
Baas pointed out that many advisors may overestimate the cost and onerousness of implementing secure processes: “An inconvenience to you is a roadblock to a hacker.”
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