Part 2: Creating a security framework for your financial advice practice

1. Develop a comprehensive cyber security policy

A well-defined cyber security policy is the backbone of a robust security framework. An effective cyber security policy should outline the roles and responsibilities of employees, procedures/guidelines on the use of company technology, data protection measures, and incident response procedures. Regularly review and update these policies to address changes in your practice and emerging threats. You can refer to this Create a cyber security policy guide that has been prepared by the Australian Government to address the increasing and aggressive online security threats.

2. Conduct regular security audits

Performing regular security audits helps identify vulnerabilities and ensures compliance with your cyber security policy. These audits generally include penetration testing, vulnerability assessments, and reviewing access controls. You may want to engage third-party experts to provide an unbiased evaluation of your security posture.

Here’s a guide for ‘Small Business Cyber Security’.

3. Implement multi-factor authentication (MFA)

MFA adds an extra layer of security by requiring users to provide two or more verification factors to access systems and data. This significantly reduces the risk of unauthorised access, even if passwords are compromised. You should consider implementing MFA for all critical systems and applications.¹

Remote and hybrid work has become the norm and securing remote access to your practice’s systems is crucial. Using Virtual Private Networks (VPNs) can help protect your users by encrypting data and masking IP addresses. It encrypts data transmitted between remote devices and your network. Ensure remote devices are equipped with up-to-date security software and enforce strict access controls.²

4. Monitor and respond to threats in real-time

Consider implementing a robust threat monitoring system to detect and respond to cyber threats in real-time. There are Security Information and Event Management (SIEM) tools available on the market which can help you to collect and analyse security data from various sources.³ Establish an incident response team and plan, which may help you to quickly address and mitigate any security incidents.

5. Educate clients on cyber security

Advisers can play a crucial role in safeguarding their clients' personal information. Here are some secure tactics to consider:

• Use secure communication channels: Avoid using email for sharing personal and financial information unless it is encrypted. Instead, use secure client portals or encrypted messaging services.
  
• Educate clients on cyber security: Inform clients about the importance of cyber security and provide guidelines on protecting their personal information. For instance, clients may not realize that email is not a secure environment for sharing sensitive information. Encourage your clients to use email encryption, which scrambles the original message and converts it into an unreadable format. Only the recipient with the private key (such as a password) can decipher the message. 
  
  Here’s a guide for encrypting emails

• Provide resources and training: Offer informational materials to help clients stay informed. A useful guide is ‘Learn the basics – It’s easy to improve your cyber security’ which is free and simple to navigate.

6.  Stay informed about regulatory requirements

The financial services industry is subject to stringent regulatory requirements regarding data protection and cyber security. Stay informed about relevant regulations and ensure your practice complies with them. Regularly review and update your security measures to align with regulatory changes.⁵

7. Consider cyber security insurance

Cyber security insurance can provide financial protection in the event of a data breach or cyberattack. Evaluate different insurance options and choose a policy that covers potential risks specific to your practice. This can help mitigate the financial impact of a security incident.⁶

8. Foster a culture of security

Creating a culture of security within your practice is essential for long-term success. Encourage employees to prioritise cyber security in their daily activities and reward proactive security measures. Regularly communicate the importance of cyber security and provide ongoing training to keep security top of mind.⁷

By implementing these advanced strategies and best practices, you can create a robust security framework that protects your financial adviser practice from cyber threats. Remember, cyber security is an ongoing process that requires continuous attention and adaptation to stay ahead of evolving threats.

1. What is Multi-Factor Authentication? Australian Signals Directorate
2. What is VPN? Microsoft
3. Design decisions associated with Security Information and Event Monitoring. Australian Signals Directorate.
4. Canva Security Incident. Canva, January 2020 
5. Guidelines for Cyber Security Incidents, Australian Signals Directorate 13 June 2024
6. Cyber Risk Insurance. Insurance Council of Australia.
7. Building a Strong Foundation: Fostering a Culture of Security Awareness in Your Organization, 2024. LinkedIn.