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Download Our Checklist: 10 Steps an RIA Firm Can Take to Reduce Wire Fraud

Registered investment adviser ("RIA") regulators at the state and federal level continue to make information and cyber security a regulatory focus area. However, compliance issues aside, RIA firms need to continue to establish the proper policies and procedures to help prevent cyber security related-issues as such issues pose an enormous business risk to all investment advisory firms. In particular, an RIA firm improperly sending a wire to an unauthorized third party posing as a client continues to pose a growing threat.

To address the growing threat of unauthorized wire transfers, we created a checklist that outlines some steps an RIA firm can take to reduce the risk of wire fraud. A few items addressed in the checklist include: 

  • Establishing policies and procedures that directly address the risk of wire fraud as part of the firm’s broader compliance policies and procedures.
  • Educating and training staff and clients on how to identify and reduce the risk of identity fraud
  • Always verbally confirming all client wire requests
  • Establishing a "secret word" with each individual client to confirm a wire request

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Note: RIA in a Box LLC is not a law firm, investment advisory firm, or a CPA firm. RIA in a Box LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities as this information should not be relied upon as currently accurate. This information is provided for educational purposes only and is not an exhaustive list of regulatory requirements.