Cyber-Terrorism
What Can Estate Planning and Wealth Planning Professionals Do! We must first protect ourselves, before we are adequately prepared to protect our clients
This article explores the collaboration processes, tools and opportunities available on the Internet for the estate planning and wealth management professionals. This article also takes an in-depth look at the potential threats to client and peer confidentiality that Cyber-Terrorism brings. The discussion also explores ways to protect privileged conversations and transmissions across the vast reaches of the global Internet. This article also suggest ways the Financial Planning Community can become proactive in controlling the CyberSpace that one million plus Financial Service Practitioners (including Estate Planning and Wealth Planning Professionals) use daily to grow and manage their practices. This article appeared in Trusts & Estates March 2002. Trusts & Estates is The Journal Of Wealth Management for advisors to high-net-worth individuals, families, and foundations.
Three Flights Changed Our World..September 11th, 2001
Headlines From MSNBC On The Evening Of The Attacks On Americans In New York
The three doomed flights bound for L.A. were American Airlines flight #11 from Boston, with a reported 92 passengers and crew aboard; American flight #77 from Washington/Dulles, with 64 passengers and crew; and United flight #175 from Boston with 65 people. American announced that the Boston flight, #11, is believed to be one of those that crashed into the World Trade Center, and the Dulles flight is the one that crashed at the Pentagon. United flight 175 from Boston appears to have been the second hijacked plane to slam into the Manhattan skyscrapers. A fourth plane, a United flight bound from Newark to San Francisco, crashed southeast of Pittsburgh.
We Are The Unsung Heroes
According to the Disaster Insurance Information Office, 12,460 commercial disaster claims and 8,003 personal claims with a total value of $12.2 billion had been filed as of Dec. 11. The insurance Information Institute (I.I.I.) estimated the attacks as causing total insured losses of about $40 billion, topping the $15.5 billion attributed to Hurricane Andrew. The property loss estimate for the World Trade Center’s twin towers was estimated at $3.5 billion while other property losses reached $5 billion. Workers’ compensation approaches $4 billion, and event cancellation, $1 billion. At ground zero in New York, a report prepared by the New York Comptroller's Office provides preliminary data on the World Trade Center costs. The loss of buildings and people: $45 billion and rebuilding the World Trade Center as smaller buildings is estimated to cost $6.7 billion. Repairing and restoring other damaged buildings will cost about $5.3 billion, for a total cost of $12 billion. Because of prior insurance and financial planning efforts of Financial Services Professionals, the dollars will be there to help cope with loss of lives as well as the loss of jobs and buildings. Our comrades need to know that they are heroes also.
Aftershocks: Business Owners And Investors
The Trusts and Estate magazine website recently carried an article that looked at the impact of the attacks and the aftershocks on the working capital of a group of America's top businesspeople and investors. The findings were quite interesting:
- Before Sept. 11th 2001: Bill Gates: The co-founder and chairman of Microsoft Corp. remained the richest person in the world as of Aug. 27, 2001 according to the annual survey by Forbes Magazine of the 400 wealthiest Americans.
- After Sept. 11th 2001: Gates' net worth fell to $54 billion , down from $63 billion.
- Before Sept. 11th 2001: Super investor Warren Buffett moved into second place.
- After Sept. 11th 2001: Warren Buffett saw his net worth fall to $33.2 billion.
The impact of the terrorist attacks of Sept. 11 on the securities industry alone will cost more than $1 billion. An SIA report estimates that the securities industry’s net operating profits for the third quarter, which showed indications of coming in at $1.0 billion to $1.4 billion in will now be a loss of $200 million This impacts your clients as well as the very wealthy.
Accessing The Risk to Estate Planning and Wealth Planning Professionals
Currently there are close to one million Financial Service Professionals in the USA. If we take this one step further and consider the fact that established practitioners spend 80% of their time with the top 20% of their clients, online collaboration sessions may exceed 98 million online customers sessions annually.
The Multiplier Effect
Collaboration sessions conservatively exceed 98 million online customers session annually in the form of e-mail, instant messages, telephone calls from PCs, WebConferencing including online file sharing and document transfer.
On Any Given Day
On any given day, Financial Service Practitioners are using or will use online collaboration tools such as E-mail, Instant Messaging and Web-Conferencing to service clients insurance, investments and financial planning needs. Millions of collaboration situations take place daily. Cyber-Terrorism could result in theft of client data. Cyber-Terrorism could result in costly litigation and injury to the professional reputation of Estate Planning and Wealth Planning Professionals.
Online Collaboration Sessions Are Increasing For These Reasons
Successful Financial Services Practitioners:\
- tend to work in germane pods
- recognize that clients depend on different professionals for the success of managing assets, insurance and investments strategies
- have a need to consult within relevant PODS of professionals to bring closure to a planning case or to deploy a planning strategy
These relevant PODs are usually dispersed across different cities, companies, professional associations and company firewalls. The teams need a way to work closely and creatively to plan, collaborate, strategize, and make decisions as they design, build and deploy financial strategies and engage clients
Online Collaboration Sessions
Online Collaboration Sessions enable Estate Planning and Wealth Planning Professionals to:
- Partner and Consult With Peers Online
- Utilize File transfers to and from clients and peers
- Use online PowerPoint animation to enhance client presentations
- Use Online Language Translators
- Use audio/video streaming e.g. RealPlayer to enhance online presentations
- Shorten the decision making and sales cycle
- Send timely periodic service alerts to clients in online privacy
- Minimize the inconvenience of travel and reduce travel costs
- Manage crisis events communications such as during market downturns and other market disasters
- Inform, educate, exchange information and share strategies with geographically dispersed team players
- Increase productivity and sales without airline and train travel
- Get Quick Answers To Rush Questions via PDAs
- Gain a competitive advantage over the competition
- Conduct visually pleasing collaborative meetings
- Conduct periodic client reviews
- Access Streaming Media Seminars i.e. Practitioners or Clients and Prospects
We Must Protect Ourselves First
There is a need for Financial Service Practitioners to control the cyberspace in which they share and collaborate highly sensitive information. Breaches of confidentiality could attract lawsuits, loss of professional designations as well as the business practice. Currently online collaboration sessions are engaged without very much regard to Internet security. In fact, the pervasive attitude is that Internet security is not a problem to contend with until it becomes an issue. September 11, 2001 has made it an ongoing issue. The Financial Planning Community need to control security in their CyberSpace. We cannot expect product providers come to task in this area. Product providers may not wish to take on this task unselfishly and without profit.