RIA Compliance Requirements for Cybersecurity

RIA Compliance Requirements for Cybersecurity

The internet provides a huge and growing frontier for criminals, and your firm is always at risk for an attack. Poor data and network management, lax protocols, and lack of knowledge can make any company susceptible. Without the proper protections, unscrupulous people can easily steal information to use, sell, or ransom back to you at an exorbitant rate.

Coding gifSince RIA compliance requirements have some very specific things to say about keeping your clients’ private data safe, you need to be proactive about cybersecurity at your firmWhether you’re tech-savvy or tech-challenged, your cybersecurity requires constant review and reinforcement.

Fortunately, industry regulations are evolving right alongside cyber crime, and accepted best practices for RIA firms are undergoing real scrutiny. You can find the SEC’s requirements for RIA’s here, so you’re prepared when the auditors come calling.

Below, we discuss 3 important requirements for RIA cybersecurity. This is not a comprehensive list, so be sure to read the SEC’s requirements yourself and look for technological solutions, like Smartria, that will help to keep your data secure.

Make Cybersecurity Part of Your Culture of Compliance

Auditors will need to see that you and your employees take not just compliance, but cybersecurity, seriously. That’s why you should pay it as much attention as you do your fiduciary duty to your clients.

Cybersecurity is an intrinsic part of your RIA compliance requirements, as careless technological practices that can result in a data breach do not align with either your privacy or code of ethics obligations as an investment advisor. To that end, you should conduct regular internal cybersecurity risk assessments, document responses to any identified threats, and engage in regular, robust training.

Take ownership of cybersecurity just as you would take ownership of any other compliance requirement. Don’t leave it to the tech guys. It’s your job to know what measures are in place and how they’re implemented.

Verify Security of Third-Party Vendors

You may already know what cybersecurity measures are being taken in your own business, but are you sure about the security of any third party vendors with whom you do business? Remember the Target cybersecurity breach of 2013, where scores of customer credit card numbers were leaked to cyber criminals?

That breach, and an estimated 63 percent of similar breaches that year, were attributable to poor vendor security. Look closely at any company that interacts (even in a limited capacity) with your data, including your IT services provider.

Before contracting with a third party vendor, be sure to ask tough questions about cybersecurity and document the process. Only give vendors the access they need to do their work, and make sure your staff understands and uses proper security protocols.

Consider the Cloud

It may seem counterintuitive, but storing data in the cloud can be more secure than using on-site storage. How could an offsite, third party server be more secure than your own? The fact is, a cloud solution partner likely has better access to better and more wide-ranging cybersecurity measures than you can implement on your own, particularly if you work alone, or your IT budget is small.

Computer Fire GifAdditionally, you should have a plan for what happens to your clients’ data if disaster strikes. Are you prepared for data recovery in case of natural disaster or an office fire? Using a cloud-based system simplifies that step and takes care of one of the SEC’s cybersecurity requirements: preventing data loss.

Another excellent option is to use solutions designed for the specific demands of investment advising. You can cover both RIA compliance requirements and the need for cybersecurity measures with an application like Smartria.

Our software offers intuitive, powerful features that not only keep you in compliance, but help to reduce your firm’s vulnerability to cyber crime. We offer customizable roles so employees can’t access sensitive information they don’t need, secure cloud-based storage for your client documents, and, most of all, peace of mind. We answer those tough vendor questions so you can be sure your client data is in the best hands.

We offer a risk-free demonstration to show you all the benefits of Smart RIA, not just for cybersecurity, but for all your RIA compliance requirements.

Focus on what matters. Use SmartRIA to streamline compliance, so you can grow your business. Click to schedule a demo.

Request a Free Demo