For instance— and you can’ t make this stuff up— multiple times we discovered that the systems provided by a local IT provider relied on the“ home” version of Windows. That makes it so easy for the bad guys to break through cyber defenses that it borders on criminal negligence.

Among local vendors who claim to have upgraded the cybersecurity of their systems, many never bothered to test their tools to ensure these were installed correctly or function properly. Some vendors provide their wealth management firm clients with laptops that aren’ t encrypted. The mobile devices they provide likely aren’ t protected either because their other clients don’ t ask for it.

Other vendors have computers that aren’ t regularly and systematically updated with software patches, an essential step for protecting against the dozens of new computer viruses created almost daily. Even worse, the Wi-Fi systems of the IT vendor’ s customer companies allow visitors to easily access them, regardless of whether visitor devices might already be infected with malware that could be passed onto a firm’ s technology.

We have even found instances where the local IT provider has not installed a business-class firewall for a financial advisor’ s office technology, even when the vendor has otherwise assured the client that the firm’ s router is secure. The result is that the wealth manager, a firm possibly responsible for( and with access to) hundreds of millions if not billions of dollars of client assets, is being protected by the same level of technology that your kids use to guard their school laptops.

Unfortunately, most financial industry participants will realize the risks of using such IT vendors only after they have experienced a material breach and lost substantial client assets. That’ s like refusing to get a colonoscopy because it could be inconvenient, messy and disruptive: You may not have a problem now, but when you find out you do, it is often far too late.

MARK HURLEY is the CEO of Digital Privacy & Protection. STEVEN RYDER is the chief strategy officer of Visory.

The mission of the INVEST IN WOMEN podcast series is to explore the most important issues that impact women financial advisors and their female clients.

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MAY 2025 | FINANCIAL ADVISOR MAGAZINE | 29