The Current Risk
You’ve likely read the news stories about the Capital One data breach that was detected last month. While this is not the first global company to have its data compromised, it is noteworthy in its scale: nearly 106 million of the bank’s customer and applicant accounts were affected. This recent incident comes about a week after Equifax announced a settlement over its 2017 data breach, which affected about 143 million people. While these occurrences are a constant risk in the current landscape, they remind us of the importance of taking proactive steps to safeguard our personal and financial information.
Whether or not you are a Capital One customer, here are some actions we advise you to consider taking to protect your personal data and accounts:
The Broader Issue: The Rise of Cybercrime and the Importance of Cybersecurity
The overarching issues raised by the Capital One data breach are the very real and growing threats of cybercrime and identity theft. Reported cybercrimes cost victims over $2.7 billion in monetary damages in 2018, according to the FBI.
As a registered investment advisor and fiduciary to our clients, Litman Gregory is bound by our fiduciary standard to put our clients’ needs first. Among other responsibilities, that means making sure our clients, and their confidential financial information that we hold, aren’t put at risk of scams, phishing, and a multitude of other techniques employed by cybercriminals.
In addition to regularly reviewing our cybersecurity policies and ensuring we are following best practices, we continue to work with a cybersecurity consultant to find new ways to protect our internal data as well as our clients’ privacy. If implemented correctly, proper controls can prevent 95% of external fraud. Some of the common tactics include:
In each instance, the fraudster attempts to impersonate someone electronically, thanks to the success of a “phishing” expedition into his or her personal emails and contacts. Sometimes this phishing is accomplished by luring someone into revealing personal information, either by email, through a copy-cat website, or over the phone.
We also suggest doing the following to help protect yourself against these and other fraudster tactics:
For many years at Litman Gregory, we have aided clients as they navigate the threats of cybercrime and protect themselves from attempted security breaches. Unfortunately, as the recent breaches indicate, cybercrime is on the rise and becoming more sophisticated. Looking ahead, we will continue to be on our guard and stay abreast of new ways that we, and our clients, can work to protect their identity and finances.
Do you have questions about how we protect client accounts or the steps you and your family can take to better protect yourselves and mitigate risk? Please call your Litman Gregory Advisor or contact us here.
Our Thoughts on the Silicon Valley Bank Failure
Recent problems in the banking industry have increased uncertainty in the financial markets. On behalf of our clients, we have taken a close look at the situation and assessed the potential consequences. In this post we summarize the circumstances at Silicon Valley Bank that led to its failure, describe the broader implications, and review what we see as minimal impact for our clients and their portfolios.
Insight Newsletter—Winter 2023
Our Insight Newsletter is now available. Included in this edition: Investment Commentary Research Update: Trend Following with Managed Futures Tax Planning Opportunities from
Research Update: Trend Following with Managed Futures
The evidence of the long-term value that trend-following managed futures bring to a balanced portfolio is compelling, even though there are shorter periods where sharp see-saw patterns can lead to disappointing returns. However, in a year like 2022 that saw significant declines for both stocks and bonds, managed futures experienced large positive gains and were one of the only asset classes to provide meaningful downside protection. This research update serves to address many of the questions that we receive about this interesting investment strategy.