Other Updates

How confident are you in your family’s financial security? Instances of financial theft, mismanagement and fraud are common in today’s headlines, many involving financial advisors and unauthorized access to personal information.

In addition to being cautious and aware of risks, you should apply the same basic concepts and disciplined approach to protecting your family’s security as you would to any business. Two important areas of focus are securing solid relationships with business associates and advisors and protecting information that could be accessed via the Internet.

Business Associates & Advisors

The Bernie Madoff and Allen Stanford alleged multibillion-dollar Ponzi schemes illustrate what can happen when due diligence is not performed prior to investing. Take the time to understand all of the details before you invest. Know where your funds are being custodied and how they are being invested. Ensure there is no conflict of interest between the investment firm and investments. If you don’t understand how an investment works, don’t invest in it.

Whether working with investment advisors, attorneys, tax advisors or others, begin by requiring a contract or letter of engagement you fully understand. Be sure it includes answers to the following questions:

• What services will be provided, and what services are not included in this agreement?
• What is the cost?
• What type of professional insurance do they have, and what are the limits? 

Internet Security

Ever-growing technological capabilities continue to offer increased convenience and benefits. However, technology also has made it easier for unauthorized people to access and use your private information. As complicated as technology can be, there are several simple steps you can take to reduce this risk.

• Do not forward any private family information via the Internet. Reputable banks, credit card and investment companies will not request confidential information via the Internet. If you receive an email requesting confidential information, it is almost certainly a phishing scheme. The request may have the appearance of a reputable company, including an extremely convincing email message with recognizable corporate logos. Information requested often includes dates of birth, Social Security numbers and PIN and bank account numbers. This information is then used to engage in credit card fraud, bank fraud or outright identity theft. If you receive this type of email, do not respond and delete it.
• Consider purchasing encryption software. Many of us have become too casual with our laptops, carrying them through airports and restaurants, leaving them in cars or out on desktops. It is important to consider strong encryption security software that protects data stored on your computer if it’s stolen or fraudulently acquired.
• Use passwords that are not easily guessed, and change them often. It doesn’t take much imagination to guess many of the passwords used by the average computer user—children’s names, dates of birth, street addresses or favorite sports teams. Make sure you change your passwords several times a year in case someone finds them written down or uses special software to discover them on your computer.
• Use different computers for business and leisure. Many technology security consultants highly recommend using a completely separate computer for your financial information than the computer you or your family members use to visit non-financial sites or surf the Internet.
• Limit remote access to financial data and property. It is very convenient to have all of your financial data at your fingertips at a coffee house or at the airport while waiting for a plane, yet it also can be very risky. Remote access without significant security measures or firewalls can allow hackers access to your passwords and those same accounts you are viewing. More often than not, you will not know your information has been breached until it is too late.

These steps may appear burdensome, especially if your family is not technically proficient. However, not taking proper security steps is like walking around the technology world in an open hospital gown—you may think you are covered and secure, but those walking behind you know better!

Remember to safeguard your family’s financial security just as you would a business. Invest the necessary time to build barriers between your family members and those who threaten their well-being.