In an increasingly digital world, cyber security should be at the top of an advice firm’s priority list.

But the pace of change in technology can often leave people not quite understanding what they need to do to protect their business from cyber attacks or vowing to ‘get around to it’ at some point.

However, as former Conservative MP Stephen McPartland, author of the McPartland Review into Cyber Security, says, a lot of cyber attacks are speculative.

He likens firms that have little or no cyber security to leaving the front door of your house open – both are invitations for opportunist thieves to strike.

So, what can advisers do to protect themselves as they increasingly digitise their businesses?

Protecting your firm

While it is great for people running a business to have a positive, confident outlook, they do need to be realistic about business risks, and cyber crime is one of them.

Statistics from market analyst Truelist show up to 94% of companies that experience a severe data loss never recover because it can take a long time to identify and contain a data breach.

According to Truelist, 51% of firms close within two years of the incident and 43% never reopen. The picture is even worse for small firms, as 70% close within a year of a big data loss.

FTRC founder Ian McKenna adds that, if an advice firm experiences a data breach, the FCA expects them to put in place and pay for cyber security protection for every customer.

According to McKenna, there is “significant evidence” cyber criminals are targeting small advice firms because the information they hold about their clients is so comprehensive and, therefore, valuable.

“So much information comes from a client fact find. Advisers will have details of their clients’ kids and the cars they drive. There is so much data to help criminals working on the dark web,” he says.

“Cyber criminals have also identified that smaller advice firms tend to be relatively vulnerable.”

McKenna points to a lot of cases being identified in the US. Is it inconceivable to believe the same is happening in the UK?

Increasing use of AI is only going to increase the need for advice firms – and not just the bigger ones – to ensure they have adequate cyber protection in place.

“You can’t have an AI strategy without cyber security – they go hand in hand,” says McPartland.

“If you are increasingly using AI and putting more business in a digital world, you need to ensure you can secure that.”

A lack of understanding about what to do to become more resilient can often be a barrier. This is where talking to an expert or getting some training can help.

For example, the Chartered Institute for Securities and Investment (CISI) runs a short online course that covers things such as the nature of cyber risk, the types of attacks to be aware of and details of the regulatory and legal requirements.

The CISI Corporate Cyber Security Professional Assessment is written and reviewed by industry experts and is suitable for anyone who works in financial services, including advice firms.

“The risks of cyber attacks occurring apply to both large and small firms, so understanding these threats and protecting your organisation from them is essential for all financial services practitioners,” says CISI executive director of global learning Mandy Gill.

“Human error is often a cause, so being able to identify and distinguish between the different threats – including malware, phishing, whaling, spyware, ransomware, trojan viruses and business email compromise – can be an effective way to manage and reduce this risk.”

The recommended study time for the course is six hours, followed by a 60-minute multiple choice test consisting of 30 questions.

The CISI also offers a range of other online CPD content in the area of cyber security, including Professional Refresher modules on topics such as cyber crime, operational resilience, financial risk and fraud risk management.

Cyber insurance is another way firms can protect themselves but, as McPartland says, they need a cyber security strategy to underpin this.

“If you go to an insurer and tell them you park your car with the keys in the ignition and no alarm, they are unlikely to insure it,” he says.

“The difference here is that you are talking about possessions in the digital world.”

That said, cyber insurance does not currently appear to be very popular among advice firms.

“Only 4% of advisers have cyber insurance,” says McKenna. “It’s crucial to have it. Ideally you want the insurer to be the same as the provider of your PI, as you don’t want a situation where they are both saying the other should pay out.”

McPartland has some sympathy for smaller advice firms.

“A lot of the problem is that the insurance market is not mature enough yet, so there aren’t enough products for SMEs,” he says.

Recovery

Having a recovery process in place is key to fighting back against things like ransomware, where criminals steal data and demand money to return it.

“If you have a process in please, you don’t need to get that data back. It’s backed up and you’re doing other things to be resilient,” says McPartland. “You can either fight it off or you recover quickly to be up and running in a couple of days, so ransomware is not the threat to you they think it is.”

McPartland says advice firms need to think about three elements together – their cyber security, their resilience to cyber attacks and the recovery process. Focusing on just one element is not enough. They all need to be in place and reviewed regularly.

“It’s important to protect your data because a lot of decisions are based on it. If someone interferes with that data, they interfere with your ability to make decisions.”

Cathay Pacific has banned a Hong Kong couple from its flights after their row with a mainland Chinese traveller over her reclining seat.

The Chinese woman had complained on social media that she was harassed by the couple seated behind her on a Cathay flight after reclining her seat.

The Hong Kong flag carrier said on Sunday that it had added the couple to its no-fly list, saying it has “a strict zero-tolerance policy” towards behaviours that disrespect fellow passengers.

The Chinese woman’s post on social media platform Xiaohongshu, which captured part of the confrontation, had garnered 194,000 likes as of Monday morning and drawn mixed reactions online.

The incident took place on a flight from Hong Kong to London on 17 September.

In her post, the Chinese woman recalled how the middle-aged couple – a husband and wife – had accused her of obstructing their view of the in-flight television and asked her to straighten her seat.

When she refused, the wife stretched her legs and put them on the armrests of her seat, then started scolding her in Cantonese and slapping her arm, the woman said.

“When she realised I couldn’t speak Cantonese, she started calling me ‘mainland girl’ in a derogatory tone,” she said.

The husband, who was seated directly behind her, “frantically pushed” the back of her seat, the woman said. Her video showed the seat vibrating.

Another scene showed the wife raising her middle finger at the woman.

The woman then sought help from a flight attendant, who suggested that she straighten her seat.

“I was shocked because it was not meal time, yet the flight attendant wanted me to compromise,” the woman said. “I rejected the suggestion.”

Several passengers who witnessed the incident criticised the Hong Kong couple’s behaviour.

“Don’t call yourself a Hong Konger, you bully,” one passenger said.

Another said, “This is too much. How old are you? Why are you bullying a young girl?”

The woman’s post on Xiaohongshu sparked similar outrage.

“If they want more space, they should have paid for first-class seats,” one person wrote.

Several commenters were quick to defend Hong Kong’s reputation, with one saying “Most people in Hong Kong are kind, this couple is an exception.”

It has also triggered a debate on whether reclining one’s aeroplane seat is an acceptable practice.

Several users said that it should be acceptable, given that the ability to recline is a built-in function of the seats.

Others said it can get uncomfortable when passengers in front recline their seats too far back.

This campaign, candidate Donald Trump is promising even more extreme versions of the policies that marked his first term. But what would higher, and more widespread, tariffs actually look like? And in what form would any retaliation come? Today on the show, Soumaya and the FT’s senior trade writer Alan Beattie discuss the candidate’s campaign promises on trade, and where they might lead.

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