Promising Fidelity Manager Departs
On September 16, Fidelity named Sonu Kalra lead manager of its OTC fund to replace Gavin Baker, who is leaving the Boston fund behemoth. Christopher Lin will co-manage the fund with Kalra.
Whenever a manager leaves, particularly a talented up-and-comer like Baker, we take note of who replaces them on the flight deck. Kalra is also the sole manager of Blue Chip Growth at Fidelity, which he’s piloted since July 2009.
Lin has been managing Fidelity’s Select Computers fund since January 2013 and Advisor StockA financial instrument giving the holder a proportion of the ownership and earnings of a company.
Selector Mid Cap since May 2016.
Baker had managed OTC since 2009, building assets under management to more than $16.3 billion by the time of his departure. He replaced Kalra, who managed OTC from 2005 to Baker’s 2009 appointment, so the fund has now come full circle with Kalra’s return.
Kalra’s previous experience at the fund should smooth the transition, as will Lin’s tech background. No change to OTC’s investment mandate—to hold at least 80% of the portfolio in stocksA financial instrument giving the holder a proportion of the ownership and earnings of a company.
traded on the NASDAQ or an over-the-counter market (and the small- and medium-sized companies found there) and 25% of assets in the tech sector—has been announced nor is expected.
Keeping Your Investments Cybersecure
Now that we’ve discussed actions you can take to protect your credit if you suspect you’ve been affected by the Equifax data hack
, we thought the opportunity was ripe to discuss other means of protecting yourself and your assets online from fraudulent activity. While we can’t give specific advice for your personal situation, here are some broad cybersecurity tips to keep in mind based on our professional and personal experience.
There are a number of preventative measures to minimize the sensitive content in your email account. A first step to take is to avoid saving any email (sent messages as well) containing detailed financial information beyond the time it’s needed. This is especially true for account numbers and any documents with your signature. Whenever possible, we suggest considering whether the convenience of email outweighs the riskThe probability that an investment will decline in value in the short term, along with the magnitude of that decline. Stocks are often considered riskier than bonds because they have a higher probability of losing money, and they tend to lose more than bonds when they do decline.
you take in storing personal and financial information in an email account.
You should be on the lookout for suspicious emails in your inbox as well. For example, if the message has a strange address in the “from” field, has spelling errors or odd text, tells you that you need to update your account information, or talks about an emergency which requires you to send money immediately, it should raise a red flag.
These “phishing” emails will usually have a hyperlink for you to click. If you are at all concerned by the contents of the email, you may want to hold off on clicking it until you can verify that it’s safe; this is a very common means for your account and computer to be compromised. (There is software you can purchase or download for free that will scan your email for harmful content to help prevent this from happening to you.) Once the hacker is in, they can use social engineering to gather details about you to attempt fraud with your existing accounts or use your information for other nefarious purposes.
Precautions Your Adviser Should Take
If you’re working with an investment adviser or broker who has access to your accounts, you may want to ask them what they are doing to protect you. For example, what would they do if they got an email purportedly from you asking them to send $10,000 to an address, account or recipient you’d never requested before? Hopefully this is something they’ve considered and have implemented policies to deal with suspected fraud or identity theft.
A warning bell should sound if your adviser or broker is sending you emails that include account numbers or other personally identifying information like a Social Security Number or birthdate that could be used to gain access to your accounts. Neither Adviser Investments nor any of the custodians we work with (Fidelity, Charles Schwab, E*Trade, TD Ameritrade or Vanguard) ever includes this kind of information in an email. And no responsible adviser or broker will ever ask you to send them this kind of information through email either.
Safeguarding Financial Accounts
There are a number of steps we urge clients to take when it comes to monitoring suspicious activity on their accounts. We suggest reviewing all credit card and financial statements as soon as they arrive or become available online. If you uncover something that raises concern, immediately contact the financial institution where the account is held, preferably by phone. It’s a good idea to never send account or personally identifiable information over email, chat or any other unsecure channel.
We also recommend that you try to avoid developing any online patterns of money movement, such as regular wire transfers that cybercriminals could replicate to make transfer patterns appear legitimate.
Finally, it’s important that you never access your online financial accounts from publically accessible networks such as libraries, coffee shops, airplanes or hotel rooms. Cybercriminals can hack into public networks to capture your keystrokes (and the passwords they contain). Likewise, make sure your home wireless network is password protected to prevent people from gaining unwanted access to your devices remotely.
Social Media Safety
Personal information about you and your loved ones provides powerful ammunition for scammers to catch you off guard and earn your trust. There’s no complete protection short of never going online (and in this digital age, that’s not a realistic expectation for most people), but there are some steps you can take to minimize risksThe probability that an investment will decline in value in the short term, along with the magnitude of that decline. Stocks are often considered riskier than bonds because they have a higher probability of losing money, and they tend to lose more than bonds when they do decline.
One critical precaution: Never post your Social Security number (even the last four digits). And consider keeping your birthdate, home address and home phone number confidential. We also encourage clients to refrain from posting announcements about impending vacations, births, children’s birthdays or the loss of a loved one.
While we acknowledge that some of the above are important life events that people understandably want to share with those they care about, publicly providing too much information can leave you susceptible to fraudsters and allow them to quickly pass a variety of tests related to the authentication of your identity and financial accounts. Never underestimate the public sources that individuals will use to learn critical facts about you.
Common Frauds to Avoid
Telephone scammers are increasingly targeting senior citizens—who as a group make twice as many purchases over the phone than the national average—with financially and emotionally manipulative tactics. These may seem obvious to many of us, but it’s worth making sure your friends and loved ones are educated on these kinds of scams. Some common financial ruses include:
- The Pigeon Drop: The right to large sum of money is promised in exchange for a “good faith” payment withdrawn from an individual’s bank account. Con artists will often employ an accomplice posing as a lawyer, banker or other seemingly trustworthy third party.
- The Fake Accident: The con artist asks for a wire transfer or check to pay for a relative’s urgent medical care. This can be particularly convincing if the scammer has done his homework and researched the names of family members via social media. A similar scam involves calling to say a family member has been arrested and needs money for bail.
- Charity Scams: Where money is solicited for bogus charities. These are especially prevalent after natural disasters.
- IRS Impersonator: In this scenario, someone claiming to be from the Internal Revenue Service (IRS) calls to inform you that there is a problem with your tax return or that you owe taxes, and will threaten legal consequences (arrest, lawsuit, revocation of a driver’s license or deportation are the most common) to convince you to make an immediate payment. (An alternate version of this scam will have them claiming you are owed a big refund to lure you into sharing personal information instead of seeking payment.) The IRS will never call you if they haven’t first mailed a bill, and they will never demand immediate payment without allowing you to question or appeal what you owe. They will also never ask for a credit card number over the phone or require a specific form of payment like a prepaid debit card.
In recent years, there has been an increase in cyberthreats that begin with a phone call. Here’s how this “ransomware” scam works: A fraudster posing as a Microsoft or Apple employee calls to alert you that there’s a problem with your software. The bogus technician then asks you to log in to your computer and grant him or her access so that they can fix the problem. Then, the scammer locks access to your computer, “kidnapping” it and all of your data until you pay a ransom.
You can never be too careful when it comes to your computer and online activity—these frauds are getting more and more sophisticated and convincing. However, legitimate representatives from Microsoft, Apple and other software providers will not call you to report problems with your computer or devices. Our best advice if you receive such a call is to hang up the phone. Please, never grant access to your financial and personal information to anyone you don’t know or trust.
It’s common to feel embarrassed or afraid after being targeted for one of these ploys, but doing nothing can only make it worse. To find a local Adult Protective Services contact to assist with law enforcement, a government-sponsored national resource line is available at (800) 677-1116.
Be Safe Out There
At Adviser Investments, we have robust security measures in place to prevent any unauthorized access to our clients’ accounts. We’ve worked closely with our account custodians to set up procedures for the wiring and transferring of money, which greatly limits the potential for fraud. We also follow up any suspicious communications, confirm any unusual requests and always adhere to the instructions clients have given us for handling their accounts. Our team knows what to look out for, and on several occasions we have been able to inform a client that their email account was compromised and prevented fraudulent activity. In serious cases, we can also put temporary holds on accounts as a further layer of protection.
The ramifications of having your investment or bank accounts hacked are frightening (and we’re sorry if we’ve alarmed you by writing about it), but it is important to protect yourself and to make sure that the people you’ve hired to manage your money are doing their utmost as well. We believe that part of the investing peace of mind we provide our clients comes not only from how we manage and grow their money, but also from how we safeguard their accounts and personal information from anyone who should not have it.
Please feel free to give us a call at (800) 492-6868 if you’d like to learn more about Adviser Investments’ services and safeguards. Fidelity also has a section of its website dedicated to account security with some useful information
if you’d like to read more on the subject.
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