We see it all over the news. Another hack, more identities stolen, and more data being exposed. We're talking more and more about it with clients and rightfully so. It’s become the new world we live in and we all need to be proactive as this landscape grows.
So, what should you be thinking about as an investor in this complex world? There are almost infinite roads to go down with this discussion, and even more ways to put you to sleep writing this, so let’s keep it focused on just a few high levels for you to think about and how we here at Spurstone work to address these risks.
How data is stored and transferred is a critical line of defense. In general terms, the more complex and more layered your protection is, likely the better.
In terms of data storage, some firms prefer to store locally and some off site. Some try to manage this themselves by hosting their own servers and systems while others use third party resources. Our team believes that we are not in the data storage business and as such should not pretend to have the time, skills and resources to better secure data than our enterprise partners that have invested billions of dollars into these issues. Our partners use industry leading encryption, securing the entire data base, each file independently and even securing any file as it is in transit to or from the servers.
Asset Custody (where your investments are held):
With the 10-year anniversary upon us, there has been an uptick in news and commentary around the ’08 financial crisis. As you may remember, this was a time of great uncertainty in the banking system and as financial institutions were crumbling many were left to wonder about the safety and security of their assets.
At Spurstone, we believe investors take enough risk investing their hard-earned wealth that it is prudent to limit the institutional risk of where it is held. As a result, due to the operational structures of bank and brokerage firms, we prefer to not hold client assets at those institutions whenever possible. While this is not always possible for the executives we work with (much of their stock compensation must be held at the issuing brokerage firm) we work to limit this risk by holding client assets at institutions that do not and cannot utilize client assets for their own operations as banks and brokerage firms do.
Your Partners and their Partners
Knowing how you handle your data and your assets is one thing, but it is also important to know the rules and policies of those you partner with. How do they encrypt data and to what levels? What do they demand of their partners? What if that firm were to fail? If they can’t answer these questions, we would recommend you continue your search for a new partner.
To learn more about how Spurstone protects clients, their data and their wealth, please reach out to our team at any time to request an introductory call.
-Tim Partner, Spurstone Executive Wealth Solutions