Data Security

Some people put a higher value on privacy than others. My wife is a privacy zealot and I am indifferent. Recently a panelist at an industry conference accused other firms of selling client data. It’s not quite to a Bezos - National Enquirer level but it caught our attention. Our blog will examine data security and share our thoughts on who owns what, as well as who is responsible for security. While we have opinions we recognize the only opinions that matter are the clients. 


When we post anything on The Internet we lose our ownership and transfer our rights to the platform. Numerous government hearings have emphasized this reality and have pushed some platform owners to ask for new government regulations. We have instituted our own family internet regulations that might make us feel good but are not that effective. Our children know more about the internet than we do. That same conundrum is true with FINRA and SEC regulations. They feel good and when we write regulations but their shelf-life is short. Unfortunately we need to trust each other which will trump all rules and regulations. 

Client Data

When we deposit our money in a bank, brokerage firm or a RIA custodian we trust the firms and don’t read the multi page user agreements. Unfortunately these firms can make money from their clients’ assets by hypothecating our securities and selling our personal information. As long as fees are going down companies will look for other areas to offset the losses. Hopefully more professionals will have the courage to call out their peers at industry events or on social media when their firm’s decisions go off the client friendly reservation.


Blockchain is not a crypto currency.  However it can help most firms increase their data security.  A recent conference named  Figure Technologies as the Blockchain Innovator of The Year.  Figure’s co-founder gave a thought provocative key-note on how blockchain can help reduce costs and fraud around wealth management.  Understanding where the blockchain puck is going is a worthy use of your time.  Satoshi Nakamoto created a software structure that made it difficult to hack customer data and seems to be worthy of our trust.

Most clients I have worked with answer the question of how they choose an advisor differently.  My summary of their answers is a good advisor must be a combination of character and competency.  Unfortunatley, our current system and the large financial services companies can work against clients and advisors  Hopefully the Blockchain can help if we include it in our team.


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