LPL Financial Customers Speak Out on BranchNet Hack
After the SEC recently censured LPL Financial for not protecting their BranchNet trading system from unauthorized access, I wondered how LPL’s customers felt about the company and the safety of their personal information. I recently had the opportunity to speak to a few of their customers and financial advisers.
Julie Murphy Casserly, a Certified Financial Planner and author of "The Emotion Behind Money" started doing business with LPL last year when her broker-dealer, Associated Securities, was acquired by LPL. She’s concerned that the SEC went too far in censuring LPL, noting, "we need to help people in the public and protect them, not just protect them. If regulation gets so tight and I’m not able to do my job which my clients have asked me to do, then what are we all doing in this industry? Truly, this raises a concern that regulators will not take into account what the consumer is asking from us as advisors." She’s pleased with LPL’s technology, noting, "LPL is one of the last broker-dealers that has the technology sophistication for me to do my job easily and allow me to properly service my clients."
Others felt that the SEC didn’t go far enough in reprimanding LPL. Aaron Gordon, vice president of Schwartz Media Strategies, a Miami, Florida public relations and marketing firm, is a customer of LPL Financial. "I think the censure was appropriate. However, the fine seems low to me. Considering how much money was at risk, $275K seems arbitrary, if not too low. Perhaps another approach would have been to fine LPL a percentage of the assets exposed to risk by their negligence."
Aaron told me that he has been a victim of debit card theft in the past, and that experience increased his concerns about the security of his personal information. "Within 24-hours, $7,000 had been debited from my checking account. Thankfully, Bank of America refunded my money, but it was a hassle. Since then, it’s always on my mind when I swipe my card or make online transactions. The safety of my information is of utmost importance. I think data security should be a given in this day and age." He also feels that financial services companies should be held to a higher standard: "If they’re going to take on the risks associated with keeping highly-sensitive information, then it’s their obligation to protect that information."
Despite his concerns, Aaron is keeping his money with the independent financial adviser that uses LPL for his investments. "For me, it’s about my relationship with my adviser. I trust that the government will take care of the problem and that LPL will ensure it doesn’t happen again."
Tina Trombley, an IT Resource Project Manager from Ohio, is also keeping her money with LPL. She told me that she became aware of the SEC’s censure and fine of LPL Financial when news of the current global financial crisis caused her to do some research in Google regarding LPL’s financial stability. The hack of LPL’s BranchNet system hasn’t caused her to change her relationship with LPL, at least not yet. As she puts it, "I am not removing my money from my accounts with LPL, but I am watching them very closely and exploring other investment options for my long-term retirement investment accounts." She also noted that she’s not worried about her data being exposed in a security breach. "I am not overly concerned about my personal information and account as I do periodic credit checks to be sure my identity is safe."
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