Registered Investment Advisers (RIAs) operate in one of the most highly regulated and targeted industries. With access to sensitive client financial data, RIAs face increasing cybersecurity requirements from the SEC and FINRA while fending off sophisticated cyberattacks. The need for cybersecurity for RIAs has never been greater.
For many firms, these demands create a perfect storm: no qualified compliance officer, limited IT resources, and constant pressure to protect client trust. Here’s a look at the top IT and security challenges RIAs face, and practical steps to overcome them.
1. Keeping Up with Increasing SEC and FINRA Cybersecurity Requirements
Both the SEC and FINRA have been steadily tightening their cybersecurity expectations for RIAs.
Key requirements include:
- Regulation S-P – Protecting client data and proper disposal of sensitive information
- Regulation S-ID – Identity theft prevention programs
- Proposed incident reporting rules – Notifying clients and regulators within set timeframes after a breach
The challenge:
Without a qualified compliance officer, many RIAs spend significant time self-managing audits and struggling to keep up with evolving regulations, which increases the risk of oversights.
The solution:
An MSP experienced in RIA compliance can help you stay audit-ready year-round with policy management, security documentation, and ongoing regulatory monitoring.
2. Vulnerability to Phishing, Ransomware, and Data Breaches
RIAs are prime targets for cybercriminals because of the sensitive client information they hold and their ability to move funds. Common threats include:
- Phishing emails designed to trick employees into sharing login credentials
- Business Email Compromise (BEC) schemes that attempt fraudulent wire transfers
- Ransomware attacks that lock systems and demand payment
Why it matters:
A successful attack can halt operations, compromise client accounts, and cause lasting reputational damage.
Best practices:
- Multi-factor authentication (MFA) on all accounts
- Email filtering tools that block malicious content before it reaches users
- Regular security awareness training to help employees spot and avoid threats
3. IT Disruptions Eat Into Client Service Time
Every hour spent troubleshooting systems, recovering from outages, or dealing with slow networks is an hour not spent serving clients.
Impact on RIAs:
- Missed calls and meetings with high-value clients
- Delays in processing transactions
- Loss of trust when technology becomes a recurring issue
Fix:
Proactive monitoring, preventive maintenance, and responsive support keep systems running smoothly so advisers can stay focused on client relationships.
4. Managing Vendors, Software Updates, and Security Training Without a Structured Process
RIAs often rely on multiple vendors, including custodians, CRM providers, portfolio management platforms, and more. Without a centralized process, it’s easy to lose track of:
- Vendor security certifications and contracts
- Required software updates and patches
- Mandatory security training for staff
Risk:
A single overlooked update or untrained employee can create a serious vulnerability.
Recommendation:
Implement a vendor management program, automated patching, and recurring security training as part of a structured IT governance plan.
5. Compliance Penalties Can Be Financially and Reputationally Devastating
Failing to meet cybersecurity and compliance standards can result in heavy fines, enforcement actions, and lasting reputational damage. The SEC and FINRA have issued penalties ranging from tens of thousands to millions of dollars for firms that failed to protect client information.
For example, in January 2025, the SEC sanctioned nine investment advisers and three broker-dealers for failing to maintain and preserve electronic communications, resulting in significant penalties, including $10 million against a major financial services firm.
In August 2024, the SEC announced enforcement actions against 26 firms — a mix of registered investment advisers and broker-dealers of varying sizes — for widespread failures in preserving electronic communications. Penalties in those cases ranged from $400,000 to $50 million per firm.
Most recently, in June 2025, FINRA fined a small brokerage firm $50,000 and issued a censure for failing to comply with cybersecurity requirements under the Safeguards Rule and other supervisory regulations.
Reality Check:
Even a small compliance gap can lead to severe consequences.
Solution:
Regular risk assessments, documented security policies, and an incident response plan help RIAs meet and prove compliance before regulators come knocking.
Bottom Line for RIAs
In today’s environment, IT and cybersecurity are inseparable from compliance and client trust. RIAs can’t afford to take a reactive approach. The financial and reputational stakes are simply too high.
By addressing growing regulatory demands, defending against cyber threats, and implementing structured IT processes, your firm can protect clients, satisfy regulators, and maintain your hard-earned reputation.
Next Step: If you’re a RIA looking to improve your IT security, meet SEC and FINRA requirements, and protect client trust, our team can help.
