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5 Simple IT Security Tips for RIAs Prepping for SEC Exams

Open the SEC examination priorities memo for 2022, jump to the information IT security and operational resiliency section, and you’ll find plenty of requirements about taking “appropriate measures.”

What you won’t see are details about what counts as an “appropriate measure.”

Our IT security experts fill in the gaps for you

Follow our tips and you’ll easily prove you’ve “taken appropriate measures” regarding information security and operational resiliency.

5 Simple IT Security Tips for RIAs Who Want To Pass SEC Examinations

1. Be a business with a mature plan

The memo devotes an entire paragraph to Business Continuity and Disaster Recovery (BCDR) planning. To really drive the point home to people who just skim the document, there’s even a “Did you know?” box.

What the SEC wants to see in your BCDR plan

Maturity: The SEC has called out BCDR before, so they’re interested in seeing the evolution of your plan.

How you’ll respond to climate change: Auditors want proof that you are prepared to respond to disruptions caused by extreme weather events.

Documentation: Write out your plan so you can hand it to the auditor to review. In your documentation, explain which technologies you’ll use to bring your business back after an incident.

Review your BCDR plan at least once a year with your IT expert

When you do, check that your plan aligns with your business needs and the SEC’s requirements.

Need a New Business Continuity and Disaster Recovery Plan?

Let’s Talk. We’ll Tailor Your Solution To Meet SEC Requirements

2. Prep for the exam by testing your team – Yep, we’re talking about practice

Unlike Allen Iverson’s infamous press conference, we do want to talk about practice – specifically the importance of cybersecurity training for your employees.

Address your weakest link: employees

The SEC knows employees can accidentally dismantle the most advanced security protections with a single click on an email link or attachment. The memo tells you to “address malicious email activities, such as phishing or account intrusions.”

Set up employee cybersecurity training and send fake phishing emails

Periodically testing your employees with fake phishing emails is the best way to train them to not click on real threats.

Tips for success:

  • Test on a quarterly basis.
  • Point out mistakes without shaming employees.
  • Offer additional training and resources when people click.
  • Keep records about your program for the SEC.

3. Watch everything

Continual threat monitoring is a single solution with an incredible ROI regarding SEC priorities. It fully or partially satisfies many of the points from the SEC memo including:

  • Preventing account intrusions
  • Responding to incidents
  • Detecting identity theft red flags
  • Managing risk created by a remote workforce

Why 24/7 is a powerhouse solution

You miss 100% of threats you don’t look for. Cybercriminals can sneak past defenses like firewalls and lurk in your system for months before striking. Continual monitoring tools flag suspicious activity so you can detect and respond to incidents, wherever they originate.

Your reputation is on the line too

Cybercriminals don’t work “normal” hours and can strike from any corner of the world. The threat to your client data, money, and reputation is always on so your defenses can never turn off.

You can automate detection but not review

Tools monitoring your environment all day, every day, flagging a lot of activity. The software does not distinguish between what is harmless and immediate threats. Only trained cybersecurity professionals have the skillset to sort flagged activity and act when necessary.

4. Stop relying on passwords

The SEC memo tells you to prevent unauthorized access. Your chance of success is low if you only use passwords to secure accounts.

Still don’t have Multifactor Authentication (MFA)? What are you waiting for?

Requiring employees to verify their identity through a unique code that only they receive just makes sense. It’s not expensive, stops cyberattacks, and satisfies SEC requirements. If you still don’t have this solution, call me right now: 602.806.8025.

5. Secure the new “workplace”

Point 6 in the memo tells you to “manage operational risk as a result of a dispersed workforce in a work-from-home environment.” Some of this is accomplished through MFA and continual monitoring, but that is not enough.

A distributed workforce scatters employees – and risk

Cybercriminals can weaponize any device used by remote workers to connect to your network. To stop attacks, get an Endpoint Detection and Response solution that is monitored 24/7/365 by cybersecurity professionals. Once set up, you will have the power to:

  • Monitor for behavior that matches tactics used by cybercriminals and stops it
  • Prevent access to USB and other removable storage devices
  • Get alerts when large amounts of data leave your environment

Long Time Since Your Last Exam? The SEC Will Call Soon

After a few years go by without an audit, it’s easy to slip into complacency and think you’ll never hear from the SEC again. That could be a costly mistake for 2 reasons.

1. The SEC is back to pre-COVID levels for the volume of exams

In the fiscal year 2021, audits recovered from their pandemic dip. There was a 3% increase in the volume of audits over the previous year.

2. AI determines who to audit

The SEC sets a target to audit 15% of all RIAs every year. All things being equal, that would work out to an examination every 6 to 7 years.

Except for the artificial intelligence that determines whom to audit doesn’t weigh all factors equally.

Outside the agency, no one knows exactly how AI works. But we do know a key factor is the length of time since the last exam. The longer it has been since your last audit, the more likely you will be selected.

IT Security and Compliance Are Overwhelming

Too many RIAs skip the IT-related aspects of compliance because they don’t have time to figure out which solutions satisfy requirements.

We designed a solution for RIAs

With our turnkey IT compliance solution, you don’t have to take on the burden of proving you’ve “taken appropriate measures” regarding information security and operational resiliency.

We do it for you

The solution is the easiest way to:

  • Put in place the right documentation for the SEC
  • Lockdown cybersecurity
  • Track changes, and updates, and demonstrate continual improvement

Start a conversation with us and stop thinking about IT security and compliance



itSynergy has been providing managed IT services and outsourced technology management to small- and mid-sized businesses for over 20 years. We are seen as trusted technology advisors by clients because we partner with them for success. Our philosophy is that when technology works as it should, it supports and enhances an organization’s ability to accomplish its goals and objectives and meet business growth goals.