Protecting Affluent Clients

Source: AICPA CPA Insider

The following includes excerpts, reproduced with permission, from an article by Douglas Kane and Paul Michael Violis, Sr., PhD.

One of the most important facts for the affluent community, as well as for advisors, to remember is that this population does not attract the low- to moderate-level criminal. Your adversaries are sophisticated criminals, including cyber hackers, identity thieves, con artists and those who perpetrate home invasions and burglaries.

Prevalent risk probability factors include:

• Wealth – The more you have, and the more information the world has about it, the greater the threat.
• Family office use – A true one-stop shop for the 21st century intruder.
• Celebrity status – Your location and tastes will forever be public knowledge.
• Neighborhood – Every affluent neighborhood is a playground for the diligent intruder.

Understanding the Culture
Time-measured trust is key in formulating a successful relationship with the affluent client. Provide the client with a nondisclosure agreement illustrating the advisor's commitment to protecting all information to which the advisor is exposed.

Protecting Privacy
The following precautions should be taken on a regular basis:

• Take note of all suspicious persons loitering in the vicinity of the family.
• Put trash identifying the client or his or her family, or containing confidential information, through a cross-cut shredder.
• Immediately address lost identification or confidential information.
• Discuss family information on a need-to-know basis.
• Ensure that employees immediately report any arrests or civil litigation, which may make them a target for compromise.
• Ensure that all new hires are subject to background investigations.
• Ensure that all employees who are terminated or who resign have an exit interview and are instructed that the confidentiality agreement they originally signed will remain in force.

For the complete article, read “The 21st Century Intruder.”

From AICPA CPA Insider, October 17, 2011, http://www.CPA2biz.com.