Is Your Money Safe? Fundamentals of Investing

Are you taking all the proper precautions to safeguard your money? In today's Fundamentals of Investing, we will cover the many scams that make investors vulnerable and the systems we are putting in place at Left Brain to protect clients. I'm your host, Brian Dress, Director of Research here at Left Brain, joined as always by our CEO and Chief Investment Officer, Nolan Langford. Nolan, welcome to the program.

Thank you, Brian. It's officially summer. I'm excited.

We got a quick preview for you. We're going to be talking about cybersecurity and a lot of the other scams that we're seeing that are affecting clients in our world of advisory. Technology is driving our world forward, but it's also empowered the bad guys. As advisors, we have unfortunately encountered a number of scams targeting our clients as well as our business directly. Today, we will cover some of the scams we've seen in the wild, some general ways that you can protect yourself as an investor, and most importantly, concrete steps that we're taking to protect our clients here at Left Brain. So Nolan, just a quick first pass at this without getting into specifics. Can you give your view of the general threat landscape that we're seeing for investors in the, in the age of tech and in AI?

Yeah. So the bad guys are, they're out in force, you know, and if you go back 100 years ago in this country, basically all you had to do was put a lock on the front door to protect yourself and your valuables. Nowadays, our valuables are hidden in bits of digital code or stowed in somebody's computer. And so the attack services have increased the number of ways that they can get in. Fortunately, the easiest and simplest way in is still through human error. So we'll talk about ways to protect ourselves in this digital age.

Thank you, Nolan. That's a good start. The thread that we're going to see in a lot of these scams is they do prey on human error. They do prey on everyone's good nature. And we want to make sure everyone's protecting themselves against all these threats that are out there. We'll start in the first topic, scams that we are seeing. I want to say first, even the most intelligent and conscientious folks have been caught up in some of these scams, these online scams, these financial scams. So we want to say everyone needs to be aware and don't let your guard down. Both through firsthand experience and through our research, we're seeing quite a number of scams with differing levels of sophistication. We want to make viewers aware of the, a few that are really widespread right now. One is phishing. So phishing is emails that are impersonating legitimate businesses that are attempting to get you to divulge sensitive information that can later be exploited. So phishing is one of the big ones that we're looking at. Business and personal email compromising. So a lot of times people's emails get compromised and then their email sends other email viruses and other scams out from their email. So that's something also to keep an eye on. And then voice impersonation in the age of AI. Voice impersonation's getting a lot better, and that's something that we wanna definitely keep an eye on. So Nolan, can you speak to each of the ones that we just mentioned here and what worries you the most?

What worries me the most is people not being vigilant. We are, as humans, you know, our nature is to trust other humans. That's our nature. But when somebody attacks you and approaches you in the digital world, you don't know if that's a human on the other end of the line or somebody impersonating a human. Or we have to assume that any approach that happens, whether it's through our text or through our email and even through our phones, is some sort of bad person trying to do harm to us. So if we start with the defense in mind, you know, I think that's helpful. As we're raising kids, we always tell them, be really careful if you don't know the person, stranger danger. And we would tell the, the listeners and our investors the exact same thing. Approach every interaction on your phone, and especially via your email and your text, as suspicious. And so we'll talk about some more specific tactics, but psychologically, we should just be aware and assume that most people that are approaching us through these, these mediums, you know, are out to do us harm.

That's a great point, Nolan, and we'll talk a little bit more about this in terms of the techniques and ways to protect yourself, but One major principle that you want to keep an eye on is not responding to unsolicited correspondence. So financial firms specifically aren't in the business of getting in touch with you for unsolicited correspondence and asking you for information and data. They already have that data. So we want to definitely have our guard up and be vigilant when we see sorts of correspondence like that from, say, our bank asking for passwords, phone numbers, email address and the like, credit card numbers. Those are all requests that we need to look at from a vigilant perspective. There are other scams that we've seen too. There are fake tech support scams out there, government impersonators, people impersonating coworkers or bosses asking you to send them gift cards. There's, believe it or not, online romance and catfishing. A lot of people have lost a lot of money and been taken for a ride from people who are purporting to be on romantic interests, things like once in a lifetime investment emails that come out. I know it sounds kind of hokey, but some people have been taken by these. And then one last one that we just heard from our director of client relations who's on the front lines with this, Marina Solomon, mentioned that check washing. So one way that you can protect yourself when writing a check is using a gel pen. Much harder to rinse that off of the check. And physically rewrite the check. So there are a lot of different scams out there. As Nolan said, they all kind of prey on our propensity to be trustful. And that's something that we want you to all keep, keep an eye on and be vigilant about. So let's move into topic 2, which is really ways to secure your money and data. So as Nolan sort of alluded to at the beginning, data is kind of gold out there in the online world today. Of course, we want to be vigilant. We want folks not to click on links or attachments from unknown senders or send their passwords or other sensitive data responding to unsolicited emails. So as I said, remember, unsolicited correspondence has to be looked at with suspicion. We also have heard in practice that part of the scam that goes on with these things is trying to give you a sense of urgency. So perhaps someone will call purporting to be your banker saying you need, you need to give your information, your account numbers or the like, urging you not to call the number on the back of the card in the bank, giving you a specific number to call. This is a scam that we want you to certainly be aware of. And again, it's always about the unsolicited correspondence that you got to be really vigilant about. And then I also wanted to mention before we go to Nolan here, we think you should monitor your accounts regularly for suspicious transactions. That helps you if something does happen, you can call your bank and actually fix it before it's too late. Set up account alerts for things like money going in, money going out, and having secure and unique passwords using a password manager. So Nolan, that's a mouthful and a lot there. I want to just talk about something specifically. Can you speak to the importance of using two-step verification or two-factor authentication?

Yeah, I think that there are, I mean, that's one of the things, but there, I think, we need to be careful. So here's some helpful tips. First is you should never give your information out to anyone. That would be the first thing, because anybody you're in contact with, you know, any institution will have your information. There's been these sort of frauds where somebody will call purporting to be, you know, the fraud department from your bank and saying, "Hey, can you give me your information to verify that, you know, this fraud occurred?" And then the person unknowingly gives their account information or their debit card information, and it's a bad guy. You know, you should never be calling some number or clicking on a link that was sent to you. If you do business with a bank and you get a text and it purports to be from that bank and it says call this number, go on their website and call that number or look on the back of your physical card and call that number. So be very vigilant. I would also say I'm going to encourage people to not answer calls from unknown numbers. There's actually a setting right on your phone where you can actually silence unknown callers. You should not be answering the phone. There's a lot of scams where you answer the phone and just say, "Hello." Now the person has a recording of your voice. It's easy for them to use AI tools to impersonate you in a real conversation. So I'd be really careful. If it is a vendor or your doctor's office or somebody that needs to reach you, they will actually leave you a voicemail. Then you can return their call on a verified number. So just be very careful. I think the same thing with inbound emails. You know, a lot of times you'll get an email and in the sender line it'll look like it's coming from your mom or your daughter or from your office. But if you just hover over the sender, don't click on it. Just put your mouse over the sender name, you'll see some weird email address. That's another give or another tell. Like Bryan mentioned, oftentimes common theme through all of these is something needs to happen urgently. And this is the perfect time to happen around the holiday when you're traveling and in a rush to get out of town or to get to work and you're getting ready to coordinate with family members. You know, there's an urgent request for money. I'm going out of town, I don't have my wallet, and it comes from a message. You don't have time to double-check, and one false move and now you have some, some problems. So be really careful about generally any interaction you have unless it's face-to-face.

Well, Nolan, in what you just said, it comes to mind is a lot of this stuff preys on people being in a hurry. We're in a rush, there's a lot going on. You know, we receive an email, it looks like it's from a valid source, we don't take a beat, take a breath, take a few minutes to think about what's going on and think about our next action. And we want to definitely encourage everyone that's watching is take a beat, take a minute, take a breath before you take an action in response to anything that you receive. And I think that just doing that simple thing can help eliminate a lot of the problems that you may have from a lot of these scammers. So that's, that's definitely something we want to mention. Nolan, thank you for all those tips and tricks. I want to move to the third topic, which is ways that we're responding specifically. So we have a lot of clients that watch here, a lot of prospective clients that watch these videos, and we want to be specific and explicit about what we're doing here at LeftBrain to try to combat these, these threats that are out there. So, Nolan, the first thing, two-factor authentication. We're being proactive in the use of two-factor authentication in a number of different ways. Can you describe our new policy from the perspective of two-factor authentication and the number of different ways that we're going to put that in place?

Usually in our experience, when a client's been compromised, it generally came from them or an outside institution. So for example, a local bank. If a client's doing business, every client's doing business at a bank, but between your debit card, checkbook, We have had clients that have had issues with their accounts at their bank. Fortunately, the accounts that clients have with us, we have two sets of eyes, so you have multiple checks and balances. One, your money's at the custodian. We currently use either Charles Schwab or Interactive Brokers, and, you know, they kind of have a no money, no money in, no money out policy. And then we act as a second set of eyes. Those distributions incoming or outgoing, you gets double-checked by us both on the front end before they happen, and then we dual authenticate those. So we may have a phone call or an email message about a money transaction, um, we're going to text or do some sort of second factor authentication to make sure that happens. So on the front end and on the back end, clients have protection. So that being said, we do encourage clients to think about any monies that they may have outside the firm, they may want to think about, does it make more sense to have that money here where you do have a second set of eyes? The other thing is you have local knowledge. So typically, you know, when transactions come through, through our office, we make sure that they make sense because we have a relationship with the clients and we know, we understand. Client's only been withdrawing $2,000 a month. All of a sudden the request comes for $100,000. There needs to be some sort of conversation and explanation, so it needs to make sense. Finally, I would just say we try to keep client data safe. If you think about these breaches, no client should be exposing any sensitive information. So every site now that you have to register for, they have, have to have a different user ID and password, and it's often different combination of rules. And what that means is it's not unusual for somebody to have 50 or 60 User ID and passwords, do not ever write those down because you can't put those anyplace safe enough if somebody grabs those, which means most people should be using some sort of digital password keeper. And best practices are you should not use the same password over again. So they should all be very unique and they shouldn't be anything easy to guess like your address, your birth date, or serial numbers like 1 through 7. As an example. So take that very seriously. And then finally, what we've been doing is for sensitive data, we're encouraging clients to exchange that through our vault, which is safe and secure, 256-bit, which is the highest level of encryption. And that's through our Wealth Tracker service, and clients can get there through the link right on our website. Each client of the firm has a digital vault which currently has unlimited storage. For all of your sensitive and confidential documents. And going forward, that's how we will share your account statements, portfolio snapshots, tax documents, and any other sensitive data will be through that vault.

Excellent. No, and that's great. And then there's one other thing I wanted to mention as far as scams that we've seen, that search engine scam. So unfortunately, and then Google, we think Google and other search engines hopefully can clean this up. But for instance, if you want to go and if you're a client of ours and you're going to try to log into your Charles Schwab account, and you go to Google Charles Schwab login, unfortunately on some of the search pages, what we've been hearing is that there might be some phony or spammy or scammy links that look like the Charles Schwab login link. You'll go in, you'll put your login information, it will capture that, and then you're compromised from that point of view. So, Nolan, I wanted to just put that one to you and ask what's the best way and the best policy for clients to be logging in to their various portals with us to avoid that problem.

They should bookmark and save the Left Brain Wealth Management homepage. We're going to put this up so you guys can see it. leftbrainwm.com, bookmark and save that. You'll see some tabs where the first one is client login. It takes you to the performance reviews. And beneath that is the client— is the Charles Schwab and the Interactive Brokers site, as well as the Wealth Tracker site. All of these you should link to after you first come to the Left Brain Wealth Management site. That way you're assured that you're ending up in the right place.

Excellent. So I just want to recap. There are a few things we just want to recap for you guys. Obviously, we want nobody that's watching this video to become a victim of one of these scams that we've been seeing. A few things we want to mention and review and remind— be the Be vigilant and be suspicious of any unsolicited communication, specifically if it's looking for information. Don't be in a hurry. If one of these spammers or scammers calls you, don't be in a hurry to give them what they're asking for. Slow down. Take a look. Call your bank. Call the financial institution directly using the number that you have, not the number that they give you. Be vigilant. Use the proper methods for disseminating and sharing information. Be careful when you receive an email or an unsolicited phone call of who it is. Use two-factor authentication. Those are just a number of the tips and tricks we think can help you to sustain yourself and avoid a lot of these scams that are out there. The harm of what happens when you get scammed can be hundreds of thousands of dollars lost. So we want everyone to try to avoid that. Nolan, any final thoughts?

On your device, be really careful. Secure your device. Basically, that's the Rosetta Stone to encrypt, unencrypt your life. So be really careful, you know, put a passcode on your device, make sure you have it in your possession at all times. Make sure you have an automatic lock feature on there. So be really careful there. And if you ever go to any websites, make sure when you're done, you actually log out of the website. Don't just click off, but actually log out so it doesn't store your credentials. I would say never, almost never, click on a link or download an attachment, either from a text message or from your email. And be really careful that you really shouldn't trust anything in the email. Just consider it, I think it's still the majority of hacks that harm, that comes to people, still comes through email. So look at that with great suspicion.

Those are all great words of wisdom, Nolan. Be vigilant, take care of yourself, secure yourself to secure your money and secure your data. If you made it this far, we ask you to like and share the video. And we hopefully other friends of yours and other colleagues can see it and get some tips, tips and tricks on how they can avoid scams. Subscribe and hit the bell for notifications. And we'd love to engage with you. Comment below with any scams that you may have seen we didn't cover or other simple ways to protect yourself you didn't hear us mention. We'd love to engage. We'd love to hear more, learn more about how we can protect ourselves and protect our clients. And with that, we'll see you on the next Fundamentals of Investing.