Top 3 questions about ID theft to ask your investment adviser


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If there’s anyone in your life who knows more intimate details about you than your hairstylist, it’s your investment adviser.

Not only does your adviser know all about how much money you have amassed for your kids’ college expenses and your retirement, your adviser also knows all those important things that you’re supposed to keep secret, such as your Social Security number and your account numbers.

You always want to be protected from ID theft, but you should be especially sensitive to it when it involves your financial adviser and your retirement nest egg.

Millions victimized by ID theft

Even though you’ve chosen a trustworthy adviser, you’re not always protected from becoming a victim of identity theft.

According to the 2016 Identity Fraud study by Javelin Strategy & Research, 13.1 million American consumers were victims of identity fraud in 2015.

Photo courtesy of Paul Bennett

Opt for a credit freeze

Paul Bennett, a financial adviser and managing director at United Capital Financial Life Management in Great Falls, Virginia, says he and his wife have twice been victimized by identity thieves and opted for credit freezes to prevent additional fraud.

If you suspect you’ve become a victim of identity theft, get your credit report for free at myBankrate.

“As a company, we offer all of our customers 10% off of LifeLock because we want them to have a credit monitoring service,” Bennett says. Lifelock Inc. is an ID theft protection service.

To avoid becoming an identity theft victim yourself, ask your investment adviser the following questions to assure you’re protected:

  • What kind of verification system is in place to prevent identity thieves from accessing my account information? While you need to log in with a user name and password, Bennett says most investment accounts also require a site key or some other form of identity verification.

    In addition, your client portal with your investment adviser typically has the account numbers blocked out, he says. Fidelity not only has their customers answer security questions, but they have a 2-step process of verification that includes a random code that you need to enter to access your account. This prevents someone from accessing your account, even if they know your user name and password.

  • What protections are in place for money transfers? “An investment adviser should never transfer funds from one investment or account to another without verifying your identity,” Bennett says. “If we get a message by email, we call you to verify the request, and if we get a phone call, we need to make sure you’re who you say you are before we do anything.”

    Every site should have encryption technology in place, Bennett says. Fidelity advises its customers to look for “https” at the beginning of a Web address, which indicates that encryption is installed.

    Fidelity customers also can sign up to receive a 6-digit transaction security code every time they request a transaction.

  • Are you vetting other companies where you are investing my money? Your financial adviser monitors your investments through multiple providers such as your 401(k) with TD Bank, your 529 college savings plan account and your stock trading account with Charles Schwab.

    “Investment advisers facilitate transactions and provide customers with an aggregated balance sheet of their investments,” Bennett says. “We vet other companies’ security through our compliance department so there are layers of protection for our customers.”

Getting the right answers from your adviser can keep you from being an ID theft victim.