June 13, 2018
(Because our cybersecurity environment is constantly changing, the article below may not reflect the most current risks and control strategies since its original publication. Some principles and general guidance may still apply, however there may be additional considerations and risk mitigation approaches not reflected here.)
While building wealth obviously has its benefits, it can also create more challenges. The Wall Street Journal recently asked me about those challenges, and I replied that one common concern our clients have is personal security.
Cybersecurity and protection of personal financial information are in the forefront of almost everyone’s minds these days, especially after the massive Equifax breach. But as people acquire assets and maintain a prominent profile, they can become a more tantalizing target for criminals in other ways.
A big part of my job is creating peace of mind. So here are some more detailed ideas about how to keep your financial life and family protected:
An LLC (limited liability company), is a way to own property anonymously, which makes it harder for people to find out what you own and where you live or vacation. It is a special business structure that allows you to create an ambiguous name for the title of your property. An attorney can help you create one. Depending on which state you live in, the LLC structure may require some additional maintenance procedures. This ownership strategy is most appropriate if you’re a well-known person or family, or the purchase price of the property is material.
Another way to prevent strangers from knowing where you live is to use a post office box for your personal mail. You may want to consider using one for your business, too, if clients or customers don’t regularly visit your office.
If you don’t anticipate needing to obtain credit soon, then we strongly recommend freezing your credit files with each of the three major credit bureaus: Equifax, TransUnion and Experian. This will help prevent someone else from obtaining a loan or credit card in your name. Just remember to thaw your files before you try to obtain a loan or credit card.
And now, thanks to a new law signed by the president, there will be no fee to freeze or thaw your file. The new rule is expected to go into effect in September, although Equifax is currently not charging fees.
Consumers may instead lock their credit. A lock is similar to a credit freeze, but terms are dictated by each of the credit bureaus, rather than by state law, and the service may be subject to annual fees. While it’s easier to unlock your credit report (you can do this online or via the credit bureaus’ apps) than it is to thaw a credit file freeze, we like the credit freeze because of the legal protections.
While having a prominent social media profile may be a part of publicizing your business or special causes, be very careful with the personal information you share. For example, don’t post pictures of your home or work location. Avoid the public “happy birthdays” for your friends and family — birth dates can be a gateway to financial information. And don’t mention when or where you’re going on a trip — wait until afterward to post the fun pictures — so that thieves don’t try to break into your home while you’re away, or set-up a ransom scheme for you or your family members when traveling abroad. Make sure your children and other people in your social circle aren’t doing these things as well.
Always use unique, hard-to-guess passwords for online accounts, and don’t use the same password for multiple accounts. Change them frequently, every six months or year, at least. I use a password manager to keep track of the seemingly endless passwords in my life.
You may even want to consider purchasing your own Wi-Fi hot spot for better internet security on the go. A hot spot is more secure than public Wi-Fi, although it uses your phone plan’s data. Also, take advantage of enhanced security features offered by financial firms, such as dual-factor authorization or voice-recognition software.
Finally, and I can’t stress this enough, use encrypted email systems whenever you send personal information. Too often, someone sends me private financial details, like income tax returns with Social Security numbers, through regular email. Regular email is easy prey for professional hackers, especially if your computer has already been afflicted with malware. Aspiriant and other Registered Investment Advisors, by law, must send financial information to clients via secure, encrypted email. Use the same method to send similar information to your wealth manager, banker, accountant, attorney or doctors.
Some famously successful people can’t avoid media attention and the spotlight it puts on their private lives. For particularly high-profile people with strong security concerns, consider hiring a security firm. Professionals can better advise you on the specific risks you face (i.e. your home is located in a secluded area without neighbors nearby), the types of security systems you should consider for your properties, and whether security guards would be wise as well.
In this high-tech 21st century, it can be more challenging to maintain a truly private life. At the same time, you have more tools to protect yourself. The risks affect everyone, especially people with greater wealth. But with awareness and common-sense proactive measures, you can make your household safer.
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