How GDPR Affects Financial Advisers

The new GDPR, or General Data Protection Regulation, has now kicked in, but it is still worth looking at the key areas of the legislation to ensure that financial advisers are being fully compliant.

As the popularity of financial advis or software proves, financial advisers deal with huge amounts of data, including personal data, meaning that compliance with the new laws is imperative, especially as regulatory breaches can happen in any area of a business.

Staff training is an essential part of GDPR compliance, as is recording evidence to prove that this type of training has been provided by the company. Every department in a company must comply with the rules, not just the HR or the IT department, and clients will expect that financial advisers are protecting their data properly.

Review Data Help

Whether it’s the data held on financial adviser software that stored in hard files, all of this information is potentially sensitive and needs to be protected properly. This means that it is important to regularly review the kind of information held on clients, how it is stored and who a financial adviser shares this with.

Data Consolidation and Storage

It is essential that it is known where exactly data is stored, especially as there are a variety of options, ranging from desktops and servers to accounting systems and the cloud. It is vital to have an accurate overview and to have effective security measures in place for each storage area. Consolidating data can make this process simpler and is also important in the case of merging companies, for example.

Improve Systems and Processes

Financial advisers will need to continually monitor, maintain and improve the way in which data is collected, handled and stored. The importance of this cannot be underestimated given that Intelliflo research reveals that 82 per cent of investors would not appoint or would want to change their source of financial advice if they were hacked.

GDPR also requires that businesses document the way in which confidential information is kept safe and are able to show these procedures to regulators if necessary. These fail-safe systems are vital in the case of a breach and to demonstrate that the business data procedures are working as effectively as possible.