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market spotlight | annual review

The year 2016 likely will be remembered for the election of Donald Trump as the 45th president of the United States and the Brexit vote. This year also saw the Fed raise interest rates for the first time since last December, noting that the labor market has continued to strengthen and that economic activity has been expanding at a moderate pace since midyear. While inflation remains below the Fed’s target of 2.0%, the Committee expects inflation to rise to its target level over the medium term on the heels of anticipated improvements in energy and import prices and continued labor strengthening. Equities began the year hitting the skids as receding oil prices and a plummeting Chinese stock market pushed stock prices down and bond prices up. By midyear equities had recovered, despite Great Britain’s decision to exit the European Union. Following the results of the presidential election, stocks surged to new highs. Whether this trend continues in 2017 remains to be seen following President-elect Trump’s first few months in office.

did you know?

A new study reveals significant work needs to be done to educate advisors about cybersecurity and help them truly understand the issues and risks.

  • Only 26% of advisors say they’re completely aware of all requirements that need to be in place in order to adhere to the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) cybersecurity guidelines.
  • A mere 17% of advisors believe their teams are aware of all requirements.
  • Less than one-fifth (18%) of advisors are very confident they would pass an OCIE cybersecurity examination if one were administered today.

*Source: Is Your Data Safe? The 2016 Financial Adviser Cybersecurity Assessment

bright ideas
The Fight Against Cyber Attacks
How financial institutions and financial advisors can become cyber secure

Accusations of Russia’s hacking of the 2016 presidential election shone an enormous spotlight on the vital role cyber security plays in the safety of our nation and to its citizens.

But cyber threats are nothing new, particularly to the financial services industry. On June 10, 2014, in a speech given at the New York Stock Exchange, then SEC Commissioner Luis A. Aguilar said, “Boards that choose to ignore, or minimize, the importance of cybersecurity oversight responsibility, do so at their own peril.”1

That was an important moment in history for financial services professionals. It set in motion stricter SEC regulations on cyber security and crackdowns on companies and individuals who don’t comply with the new guidelines.

In June 2016, Morgan Stanley agreed to pay a $1 million penalty after some of its customer information was hacked and offered for sale online.2Then, in November 2016, FINRA fined Lincoln Financial $650,000 for failing to protect client data.3

As hackers become more sophisticated, financial entities and professionals must become increasingly diligent to protect sensitive data and to meet the annually updated government rules.

The Disconnect

In July of last year, we got a snapshot of what financial advisors think about the threat of cybersecurity and how prepared they feel to combat that threat. A study conducted by the Financial Planning Association and TD Ameritrade revealed that a vast majority of advisors (81 percent) view cybersecurity as a high priority. However, only 44 percent of advisors said they fully understand the issues and risks associated with cybersecurity. Even more troubling, a mere 29 percent of advisors say they are “fully prepared to manage and mitigate the risks associated with cybersecurity.”4

Cybersecurity Preparedness

Earlier this month, the SEC announced its list of exam priorities for 2017. It should come as no shock that cybersecurity remains among the top concerns for the governing agency. As stated, “the Office of Compliance Inspections and Examinations (OCIE) will continue its ongoing initiative to examine for cybersecurity compliance procedures and controls, including testing the implementation of those procedures and controls at broker-dealers and investment advisors.”5

At Beacon, we take cybersecurity very seriously. We have always complied with the government regulations, but in 2015, we developed additional systems and procedures including our Electronic Technology & Communications Policy. This document is designed to communicate to firm personnel exactly how our systems work and what rules to follow to maintain strict compliance standards at all levels of the company.

Cybersecurity Checklist

In today’s world with its looming data threats, we at Beacon believe it’s important to give special attention to the following items:

  •  Do you fully understand the risks and threats inherent in today’s cyber world?
  •  Do you regularly test and assess your control structure?
  • Are your technical controls (firewalls, software, backup solutions, hardware) in place and effective?
  • Are your administrative controls—your policies and procedures—in place and effective?
  • Are your physical controls, your locks, alarms, battery backups and cameras, in place and effective?

It’s imperative that you are regularly testing these processes and systems both internally and externally by engaging third-party providers to ensure that your controls are not only in place, but that they are effectively combatting cyber threats.

At Beacon, we are committed to cybersecurity. For further assistance on how to run and maintain a cyber secure business, contact your wholesaler today!




Source: Is Your Data Safe? The 2016 Financial Adviser Cybersecurity Assessment


beacon news

This month we launched the Beacon Proposal Builder app which now gives advisors on-demand access to create custom illustrations and Monte Carlo simulations. Click here for a quick video on how to get started!



Beacon Capital Management, Inc. is an investment advisory firm registered with the Securities and Exchange Commission. Additional information about Beacon Capital Management is also available on the SEC’s website at under CRD number 120641. Beacon Capital Management only transacts business in states where it is properly registered, or excluded or exempted from registration requirements.

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