Cybersecurity, particularly security pertaining to our financial matters, continues to be top of mind. As a result of a recent inquiry, we have summarized some of the ways that both Schwab and Sanctuary work to protect our client’s accounts. We also learned that there are additional protections that Schwab does not share so they can keep them “under the radar.” In this age of artificial intelligence, it is good to know we have partners using their actual intelligence to evaluate and protect against ongoing threats.

Here’s how some of that protection is layered – particularly as it applies to opening new accounts or transferring funds:

  1. Authority over your accounts is deliberately limited. PrairieFire acts under a Limited Power of Attorney, which grants them trading and fee-debit authority only. It does not grant them authority to move assets to an account that isn’t the clients. Any distribution to a third party requires the client’s separate, documented authorization.
  2. Schwab verifies the client instructions directly. For money movement to a new or unlinked destination, Schwab requires client authorization on their own forms and independently validates it. Depending on the request type and dollar amount, that validation could include a verbal callback to the number of record, signature verification or the most common Schwab Alliance confirmation. Schwab makes contact based on the information already on file, not at whatever information a request might supply.
  3. Changes to the client’s profile trigger their own scrutiny. A common fraud pattern is to first change the address, phone, or email on an account, then request a withdrawal. Schwab applies holding periods and re-verification on money movement following a recent profile change, and PrairieFire as the advisor and the client receive independent notification of any such change.
  4. Notifications occur independently. Confirmations and alerts for account openings, profile changes, and transfers go directly to you, the client (and alerts for the advisor) from Schwab. This is an independent check.

“At Schwab, nothing is more important than maintaining and growing the trust our clients have in us, including protecting their personal information and assets.

As part of these ongoing efforts, Schwab is evaluating and implementing additional security enhancements, including account lock features designed to give clients greater visibility into and control over outbound account transfers.”

Many of the measures that we follow including phone call verifications of fund movements, Docusign verifications, dual authentication can all be cumbersome.  However, this vigilance remains important.  We welcome any feedback or questions.

Matt