By Brian Littlejohn
Among the many challenges the world faced last year, 2020 was a record-breaking year for data breaches and cyberattacks. Indeed, cybercrimes are becoming an increasingly present threat, both in terms of the sheer number and sophistication of attacks.
Among these crimes, financial identity theft continues to be the biggest risk to individuals. As hackers and identity thieves find new ways to steal sensitive information, wealthy investors would be wise to embrace a few key cybersecurity best practices to safeguard their assets.
#1: Secure Your Home Wi-Fi & Avoid Public Networks
Cybersecurity starts at home. The best practice is to encrypt your home network, which makes it more difficult for other people to monitor your activities and steal your personal information. To secure your network, simply update your router settings to either WPA3 Personal or WPA2 Personal.
In addition, avoid using public Wi-Fi, which makes you vulnerable to cybersecurity threats. If you tend to travel frequently or work from home, it's worth investing in a virtual private network (VPN) service. A VPN allows you to connect to public Wi-Fi securely by encrypting the data you send over the network.
#2: Update Your Operating System
Out-of-date operating systems, browsers and antivirus software make it easier for hackers to compromise your devices and access your personal data. Keeping these up to date is another cybersecurity best practice. With malware attacks on the rise, you should also make sure your firewall protects against newer, more sophisticated attacks.
#3: Use Strong Passwords & Two-Factor Authentication
If you tend to use the same password across multiple accounts, one compromised account can result in a major cybersecurity threat. As a best practice, consider using a password manager to generate and store strong passwords.
In addition, turn on two-factor authentication, when possible, to further safeguard your accounts. This requires a second check before login, which can be a helpful backstop if your password is stolen.
#4: Beware of Email Scams
Phishing continues to be one of the most prevalent cybersecurity threats in the United States. To avoid these scams, the best practice is to never click on suspicious links in an email, especially if you don't recognize the sender.
If you're not sure if an email is legitimate, contact the sender on a different platform before responding. A good rule of thumb is to never share sensitive information over email, as it can be easily compromised.
#5: Monitor Your Credit & Digital Footprint
One way to catch financial identity theft early is to keep a close eye on your credit score and report. Any sudden or unexpected changes to your credit can indicate a security breach.
Many credit card companies and financial institutions offer credit monitoring as a convenience. Alternatively, you can track your credit score using one of the many free apps available. You can also request a free copy of your credit report once per year.
An additional best practice is to monitor the internet for potentially compromising personal information. For example, you can set up a Google alert for your name, so you'll receive an email if anything new appears in your search results.
For Wealthy Investors, Cybersecurity Is Non-Negotiable
Investors seeking to preserve and grow their wealth can't afford to ignore the looming threat of a data breach or cyberattack. Beyond these best practices, you may also want to consider cyber insurance, which can help mitigate financial loss if your identity is stolen. Lastly, if you work with a financial advisor or wealth manager, be sure to ask what cybersecurity measures they have in place to protect your personal information and financial assets.
About the Author: Brian Littlejohn
Brian Littlejohn, CFP®, CFA® is the founder of Sherwood Wealth Management, a boutique wealth management firm located in Glenwood Springs, Colorado. As a fiduciary financial advisor, Brian helps his clients navigate the complexities of sudden wealth.
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