Becoming Financial Advisory Services
Information Collected and Shared
Information it receives from them on applications or other forms;
Information about their transactions with BFAS or others; and
Information it receives from a consumer reporting agency.
Below are the reasons for which BFAS may share a client’s personal information:
With specific third parties as requested by the client (see Sample 11);
For everyday business purposes – such as to process client transactions, maintain client account(s), respond to court orders and legal investigations, or report to credit bureaus;
For marketing by BFAS – to offer BFAS’s products and services to clients;
If a client decides to close his or her account(s) or becomes an inactive customer, BFAS will adhere to the privacy policies and practices as described in this Policies and Procedures manual, as updated.
BFAS uses various methods to store and archive client files and other information. Third party services or contractors used have been made aware of the importance BFAS places on both firm and client information security. BFAS also restricts access to clients’ personal and account information to those employees who need to know that information to provide products or services to its clients. In addition to electronic protection, procedural safeguards, and personnel measures, BFAS has implemented reasonable physical security measures at its home office location
The names of BFAS’s current and former access persons can be found in Exhibit 2.
In addition to BFAS’s listed access persons, any IT persons or other technical consultants employed at the firm may also have access to non-public client information at any time. An on-site or off-site server that stores client information, third-party software that generates statements or performance reports, or third-party client portals designed to store client files all hold the potential for a breach of non-public client information.
To mitigate a possible breach of the private information, BFAS uses encryption software on all computers and carefully evaluates any third-party providers, employees, and consultants with regard to their security protocols, privacy policies, and/or security and privacy training.
The system is tested and monitored at least annually.
The test conducted by the CCO will include the following activities:
Attempt to access a random sample of firm devices to ensure that proper passwords are in place to prevent access;
Attempt to access users’ accounts with the proper password to ensure that two-factor authentication prevents system access; and
Attempt to restore a sample of files and records to ensure that the restoration process is sufficient and properly configured.
The results from the annual test will be documented and utilized as an opportunity to update the Cyber Security & Information Security Policy.
The SEC and CFTC (U.S. Commodity Futures Trading Commission), and many state regulators, have published rules concerning identity theft encouraging or requiring investment advisers to train firm personnel to recognize “red flags” in this area. While many of these provisions are also covered in the firm’s broader privacy and AML policies, the list below is a brief non-exhaustive listing of the items and information that all BFAS personnel should monitor to guard against any breach of a client’s identity:
SAFEGUARDING IDENTIFYING INFORMATION
Individual client’s social security numbers
Corporate or other entity client’s tax identification numbers
Individual driver’s license number or other personal identification card
Financial account numbers (credit card, bank, investment, etc.) and any accompanying passwords or access codes
POTENTIAL CAUSES OF IDENTITY INFORMATION BREACHES
Loss of theft of computers and/or other equipment
Hacking of computer networks
Inadvertent exposure of client information to unauthorized individuals (non-locked files, files left on desk, cleaning services, shredding services, etc.)
Physical break-ins / theft
BFAS personnel are instructed to notify and report to the firm’s CCO, or other designated principal, if they detect or have reason to believe that any of the above shown red flag activities may have occurred or if any of the red flag information listed may have been stolen or leaked by any firm personnel. The CCO or principal is then tasked with investigating the report and taking appropriate actions. The non-exhaustive list of possible follow-up actions includes notification of the parties involved, notification of appropriate regulatory officials if required, taking remedial actions to assist in the recovery of the stolen information, and possible sanctions of firm personnel if deemed necessary.
On an annual basis, BFAS will conduct a firm-wide training session to ensure that staff members are properly trained and equipped to implement the above policies. New staff members will receive training, led by the CCO, within one (1) month of their initial hire date.
BFAS will retain records for at least 5 years after the year in which the record was produced, or as otherwise required by law. With respect to disposal of non-public personal information, BFAS will take reasonable measures to protect against unauthorized access to or use of such information in connection with its disposal.
BFAS takes the privacy and confidentiality of all its clients and personnel very seriously. It will continue to make, and document, any changes needed to promote the security non-public information.