Speaking during a HUB24 webinar, Mr Jack said that as reports of cyber crime and the associated financial losses continue to increase, cyber security education is becoming even more important.
“Most advice firms are small to medium businesses, and the data that they hold on file is incredibly rich data and very personal to their clients. If someone was to get a hold of this information and make it available online, it would have a high impact on the advice business and their clients,” he said.
“The Cyber Collective recently undertook some research with professional services practices and found that 64 per cent of clients would leave their trusted service provider if their data were exposed.
“So, from a financial adviser’s point of view, it’s confronting to think you could lose up to two-thirds of your client base and the income that goes with it. Not to mention the reputational damage to your brand.”
However, Mr Jack said there are numerous precautions advice practices can take to mitigate the impact of a cyber attack.
“While it’s important to have the right systems and IT security in place, you also need to bring your team members on the journey, ensure they are well trained in the right processes, have the technical experience and a clear understanding of what to look out for,” he said.
“Protecting your business and your client’s information involves championing the right culture among your people, to ensure they are proactive and vigilant in their daily practices.”
He added that maintaining a strong cyber security plan can help advice practices improve client relationships.
“There’s a huge opportunity for advisers to have proactive conversations with their clients about their cyber security processes,” Mr Jack said.
“The feedback we’ve had from advisers who have taken this approach is that their clients appreciate new initiatives and processes that address cyber security and assist in looking after their data.”
