Protecting Assets From More Than Market Loss

What most clients reach out to us about when they think about losing money is the idea of market loss. “We’re worried about [this current event/this future event] and what if [that happens]?” It’s a fair thing to worry about, particularly as you get to the point of living on your money rather than accumulating and saving more money, but it often misses the big picture. For example, while the risk of losing money in the market is always a fair and genuine risk, studies on financial planning value often peg the value of “behavioral coaching”, aka “not selling when the market declines” at as much as 2% of the value of a planner every year, because locking in a double-digit percentage loss based on panic essentially makes the planner worth their weight in gold.

But there are other ways people can lose money, and that’s what we want to talk about in particular today. How people can have money lost or stolen from them, and some safeguards to put in place.

Using Secure Document Systems & Secure Emails

One of the most common everyday mistakes we see folks perform all the time is sending sensitive information in an unsecure manner. Whether it’s emailing something like a Social Security number in a plain text email, or otherwise attaching copies of important documents like a tax return to an email, it’s important not to share non-public information like your Social Security number, account numbers, or mother’s maiden name in plain communication channels such as emails or text messages.

The easiest way to securely share such data is to either upload documentation to a secure portal like the Wealth Planning Portal or the Performance Reporting Portal, or to request a secure email be sent to you that you can then reply to directly. By using these systems, you keep sensitive data out of the less secure systems used to transport email traffic from sending and receiving parties, and keep your data in a secure and encrypted environment.

2 Factor Authentication

Many people like to forgo setting up 2 factor authentication or otherwise check the “remember this device” option at their earliest convenience. After all, who else is going to use their computer or their phone? Well, it turns out, plenty of people. Whether it’s a friend or partner, or even just letting someone else use your computer “for a minute,” having your credentials saved to your accounts through password-remembering functions like those on your web browser, combined with forgoing or removing 2 factor authentication, results in essentially leaving sensitive accounts open to anyone with access to your devices, whether in person or via remote connection viruses.

It’s helpful to always keep at least two points of security between you and sensitive systems, even if it creates an inconvenience. No one likes having to wait for a text message security token or pull open their Google Authenticator app, but keeping your passwords unsaved in your browsers and having 2 factor authentication enabled across all of your sensitive systems and passwords provide meaningful hurdles. Even if you’re only forgoing one security function or another, would you want to leave one of two locks to your life savings unlocked at all times? Certainly not.

Using The Native App Rather Than the Web Browser

While many people prefer to go to the website on their computer to access their financial institutions, often people’s process for reaching their institution is to either click on the most recent email they’ve received from that institution or to Google the institution rather than going directly to the website. Both can present an opportunity to click on a malicious link sent by a spammer to email or to click on a dummy site that shows up in search results rather than the actual company website. I can hear some folks scoffing at the latter happening, but when was the last time you searched for a hotel room only to realize you were on an aggregator or middleman website rather than the web page of the hotel you were trying to book with?

An easy solution for this, beyond bookmarking the actual login page for your financial institutions on your computer, is to also download the app. Most financial institutions, such as your bank or brokerage platform, have a phone app for their customers.  For example, Charles Schwab offers a dedicated app, which is useful for check and mobile deposits, setting up transfers, or checking balances.

Freezing Credit

With as little as your name, date of birth, and Social Security number, almost anyone can pretend to be you. At least as far as borrowing money is concerned. Whether it’s taking out credit cards in your name, trying to sign for a payday loan, or otherwise just mucking about with your financials, it’s just not that hard to get into someone’s personal finances with the right information on hand!

An easy way to prevent the risk of ending up with a loan someone else took out in your name is to freeze your credit with the three major credit bureaus. Each can be done online in a matter of minutes, and doing so is free. The only thing you have to keep in mind is that if you want to borrow more money in the future by opening a new credit card or taking out a loan of some sort, you’ll have to contact the credit bureaus to unfreeze your credit beforehand.

To get started on freezing your credit, you can visit the Freeze Page for each major credit union at the addresses below:

• Freeze Your Credit with Equifax
• Freeze Your Credit with Experian
• Freeze Your Credit with Transunion

Setting up an IRS PIN

Believe it or not, a common form of fraud can even occur through your taxes! With as little as your name, date of birth, and Social Security number (frequently all conveniently packaged on many tax forms you receive in the mail), anyone can file a Form 1040 for your tax return, claim that they’ve paid the taxes you’ve paid (or more if they’re sly about it) and set up ACH instructions to have your tax refund paid to them. You’re only likely to discover the problem after the fact when you try to file your taxes and are rejected for having “already filed them!”

An easy resolution for this is to establish a PIN for your IRS account by registering an account with the IRS (more than just knowing they have your name on file) and registering for the PIN. Just be sure not to lose it, as you will need it to file your taxes, and so will your tax preparer.

Blocking New ACH Links

When we establish client accounts, we frequently have them set up bank links right away. This ensures they can contribute or distribute money as needed without having to pause for the hassle of setting up new links. However, it’s not impossible for someone to either get into your account or to enter your account information as a source for bill payments. Many financial institutions offer an account profile setting or a concierge service for blocking new payment links from being applied to your account.

For example, if you call Charles Schwab’s support team (800-515-2157), say “lock account” at the verbal prompt instructions, and then tell them you’d like to place a security lock on your account, then they can do so. Having that lock placed will prevent any and all payments from being distributed from your account or billed to your account from otherwise unauthorized third parties.

The Balance: Security or Convenience

Whether we like it or not, we are living in a world more heavily inundated with more frequent and more serious security risks. There is always a balance between opting to ensure your assets and accounts are better protected from fraud and theft and being inconvenienced by the same security measures. While it can be very convenient to save passwords, waive 2 factor authentication, or otherwise to forgo the extra security steps your financial institutions offer or suggest, it’s simply not worth the risk. Your wellbeing, and the wellbeing of your family, depends on you protecting your financial interests first and foremost.