Cyberattacks the 'Single Greatest Threat' to Advisors' Business: Joel Bruckenstein

Other co-op members include Redtail, Orion and Riskalyze, which share data through the cleverDome network.

Just as advisors fail to understand the changing "velocity of technology," cybersecurity — both threats and the solutions — are also changing rapidly, Bruckenstein said. "Most people think of [cybersecurity] as part of their regulatory responsibilities, and they'll go to whomever their regulatory consultant or attorney is and say, 'What should I be doing?' They give them a list of stuff to do, and they think they're done. And they're not."

Cybersecurity is "a subject that intimidates advisors a little bit; technology intimidates them; [cyber] is exponentially more complicated for them to understand," Bruckenstein said. "I think that's why I'm so passionate about cleverDome, because advisors will never figure this out on their own. You need a reliable third-party source that can provide them with more than the bare minimum."

A recent T3 survey of more than 5,500 advisors on their use of a third-party provider for cloud hosting or cybersecurity found that only 5.68% use one.

Bruckenstein opines that "a lot of advisors don't understand that they need" a third-party provider. "You have a lot of the hybrid reps who say, 'OK, my broker-dealer has come in and done a security audit'; fine, that means that they've passed the minimal amount that FINRA requires. It doesn't mean that they're doing all the best practices that they should be doing."

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• TD Ameritrade Joins cleverDome to Boost Cybersecurity