Equifax and Personal Data Security

Equifax Assistant

Our Comment by J. David Lewis – Equifax reported a security breach that occurred several months ago. It set off shock and concern.  We, like virtually everyone, have seen many news items that repeat the same advice – check your credit reports, consider placing a credit freeze on your files, monitor your existing credit cards and bank account, consider a fraud alert and file your taxes early.  I have seen these discussed so many ways, I don’t see reason to repeat the details.  See them here.  Let’s put Personal Data Security into broader context.

Despite this being the largest data breach in history, it is one breach. There have been several recently.  It is reasonable to assume someone troublesome probably has much of our personal data already.  There is an Equifax website purporting to tell you whether your data was, may have been or probably was not breached – click here. We have a client phone call note that reads:

“He asked if I had used the website, or read the reviews, or looked at the small print at the bottom. His experience was that, after putting in everyone’s information the first time and recording the responses, he decided to try again, just to make sure.  The second time he put everyone’s info in, he received different answers.”

This is not comforting. The facts are, you cannot know whether your data was breached this time or years ago – maybe several times.  Experts think this data will probably not be used for months or years.  We will forget this breach, because there will be another – possibly bigger.  To believe you have the ability to know whether your data is secure creates more risks than assuming it has been breached. YOU have to watch for misuses, whether or not there was a recent breach.

Wow! Am I pessimistic or what?

A discipline of good personal data hygiene seems the most viable protection. These risks cannot be eliminated, only rendered less likely to disrupt our lives.  Therefore, the advice above is not just for this event.  It should be an ongoing part of our lives:

  • Check your credit reports – I have a phone app (Days Since Tasks) that gives a reminder to check a credit bureau report every four months. For example, my most recent was Equifax. It took about 30 minutes to download and review the report. When I clicked the reminder complete, it was moved forward a year, for another free Equifax report.
  • Consider placing a credit freeze on your files – I have not personally done this, but am considering it. My credit reports list organizations that got reports. Some seem odd and may contribute to my junk mail. Emily Watts, in our office, can discuss her interesting previous work experience, approving loans when she encountered these freezes.
  • Monitor your existing credit cards and bank account – Virtually all client investment accounts we monitor are reviewed every day, for transactions inconsistent with our expectations. Similar reviews have been a part of my routine since Resource Advisory Services was small. I had to watch every penny. Most mornings, I download transactions from two bank accounts and three credit cards for household accounting software. Then I check the bank accounts and Resource Advisory Services credit cards online for pending transactions. This usually takes from 10 to 20 minutes. If I have bills to pay, it may take a little longer.
  • Consider a fraud alert – From what I see, this has a good chance of giving a false sense of security. Basically, it is putting a note in your file that says “be careful about my data.” I have put notes in my credit reports, calling attention to names I have never used. When I saw the notes in later reports, they were obscure. I cannot imagine anyone noticing. Finally, the erroneous names disappeared. Maybe something positive happened.
  • File your taxes early – I wish I could. I usually don’t have the information to file early. If you can, filing early is definitely good personal data hygiene. I personally know several cases where false returns were filed for refunds. Clearing those up is frustrating.

We can be disappointed in Equifax, Target, BlueCross BlueShield and whoever else has a future large or small data breach.  I have been to enough cybersecurity continuing education classes to be convinced none of these are carelessness.  They suffer tremendously, like we all do.  Your protection is not something you can offload to anyone.  There may be potential regulations that could help some, like the one that gets us free annual credit reports.  I don’t see an appetite for new regulation in our government these days.

It is up to you to develop a discipline of good personal data hygiene that gives you as much peace of mind as you can achieve, understanding that you will never have complete foolproof security.  We live in a dangerous world.  Consider which is more useful – time in social media or good personal data hygiene – while you sit waiting for the next explosion.

There is more to money than money®

Contact David Lewis with DLewis@ResourceAdv.com. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family. He founded Resource Advisory Services in 1985.  National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986. He served on its national Board of Directors from 2013 to 2016, has been its Treasurer and is currently on its Audit Committee.

Financial Advisor Fees & Fiduciary Best Practices

Be careful about any advisor who is shy about the cost of their services.

This is our third article in a series discussing our approach to the Institute for the Fiduciary Standard’s Best Practices.  Previous articles are 401(k) to IRA Rollovers and Fiduciary Standards and Communicating Fiduciary Advice – on our website.  Retirement account rollovers were used to illustrate the importance of having an advisor who actually puts their clients’ best interest first.  The way your advisor communicates with you, including about fees, is important for helping you understand issues that may color their advice in their favor.

Until recently we have been concerned that a 60-day delay in implementing the Department of Labor’s Fiduciary Rule would foretell its demise. We are relieved that the delay will not be extended beyond June 9, 2017, when the provisions are scheduled to be effective.  Any advisor, to any retirement account, will be required to operate by the standards of the DOL Fiduciary Rule.  This is a huge step forward for retirement accounts.  The Fiduciary Best Practices are still very important.  Many investment decision do not involve retirement accounts and many financial decisions do not involve investments.  This article addresses Best Practice Item 4, which concerns the fees you pay for financial advice:

  1. Provide a written statement of total fees and underlying investment expenses paid by the client. Include any payments to the advisor or the firm or related parties from any third party resulting from the advisor’s recommendations.

Your advisor provides a good faith estimate of fees and expenses in writing during the starting phase of the engagement when the investment policy is agreed to. Thereafter, your advisor will offer to all clients and will provide, upon request, an annual good faith estimate in writing of total fees and expenses incurred by each client and paid to the firm or related parties because of my advice.

Resource Advisory Services never receives any compensation from any provider of investment products or services we recommend to clients – in keeping with the NAPFA Fiduciary Oath as published on our website.  We also adhere to the related CFP® Fee-Only method of compensation.

From the beginning of Resource Advisory Services, complete fees transparency has been our policy. We abandon estimates of hourly fees for projects, because we do not want clients making these decisions without a statement of the actual cost.  We are in this business and have the most control over our expenses.  We should clearly state the total cost of our Recommendations Reports and put the amount in your engagement agreement.  Guidelines for Recommendations Report Fees are available on our website.

We become quite specific about fees when we describe Ongoing Relationships within Recommendations Reports.  At that point, we are able to give a clear statement for the first year’s most likely total fees – in dollars – with our estimate of the range that can be reasonably expected.  The higher end of the range would imply greater wealth than expected, while the lower end would imply weaker results.  Each Quarterly Report includes a clear statement of total fees paid to Resource Advisory Services during the preceding twelve months – also in dollars. Guidelines for these fees are at Retainer Relationship Fees on our website.

We are comprehensive financial planners.  Transparency about fees means you should understand clearly what you will receive and what you will pay.  We are a resource that provides advice and service – Resource Advisory Services.  Although we manage investments, we believe investment management is no more that 50% of the value derived by our clients.  Click “What to Expect” above for more.

There is more to money than money®.

Contact J. David Lewis with DLewis@ResourceAdv.com. He is a passionate advocate for fiduciary, fee-only financial planning and has been associated with financial services since childhood in a banking family.  He founded Resource Advisory Services in 1985.  National Association of Personal Financial Advisors (NAPFA) was formed only a few years before. Lewis became a NAPFA-Registered Financial Advisor in 1986.  From September 2013 through August 2016, he served on its National Board of Directors. 

Communicating Fiduciary Advice

Resource Advisory Services has been proud to be a fiduciary since its founding. In 2016, we subscribed to The Institute for the Fiduciary Standard Best Practices, which are a clear code of conduct for what you should expect from your advisor. Recently we used 401(k) to IRA Rollovers, to illustrate the importance of these Best Practices for one type of transaction, where non-fiduciary advice costs consumers a great deal in unnecessary expense. That blog is one example of the broader standards you should expect in fiduciary commitment to your best interest whenever you get advice for any financial matters.  The second and third Best Practices further describes the experience you should get from your advisor. What to Expect, on the tab above, follows our typical relationships from your initial interest in being our client through an ongoing relationship. There, you can see how these next two Best Practices are woven throughout our work:

2.  Establish and document a “reasonable basis” for advice in the best interest of the client. Advice is given on a “reasonable basis” and a summary of this “reasonable basis” will be provided by your advisor, in writing, upon request.

3.  Communicate clearly and truthfully, both orally and in writing. Do not mislead. Make all disclosures and important agreements in writing. All important client agreements and disclosures are put in writing and no written or verbal statements are misleading.

For us, routine written delivery of the basis for our advice is a part of our workflow – not just on request. Before my earliest experience as a financial advisor, I understood that writing forces a very high level of discipline.  It helps develop and communicate the reasons our advice is the best advice we can give.  Writing enhances clarity for us advisors as much as it documents the basis for our recommendations.  If we cannot articulate our reasons in text, the advice probably needs more work to be sure it is in the best interest of our client. At the beginning of each relationship, we write specifically for each individual client’s situations in a Recommendations Reports, using language tailored specifically to their situation and ability to understand. Our Quarterly Reports continue by building a written diary for ongoing relationships.

Often, we want couples to discuss our advice in private, before a meeting with us. This gives an opportunity to consider the need for clarification in the meeting.  When we sit down together, they usually have an understanding of the issues and have done much of the work for both to be comfortable with the decisions made.  Then, we and our clients can revisit what was understood years after decisions were made.

Things don’t always go as expected. This gets to Best Practice Number 3.  When we are giving advice or reporting results, we know we must be very careful to avoid anything that might be misleading or misunderstood.  With our style of writing, we are forced to look for language that might unintentionally mislead.  As we monitor clients’ relationships, we have documents to compare what was expected with what actually happens.  It is easy to imagine things are on track when they are not.  Knowing we have written about our expectations holds us accountable to the things we said in giving advice.  If things are going off track, we and our clients are more likely to recognize when an adjustment is needed, instead of that uneasy feeling when we are not quite sure we remember what was said a few months ago.  The documents can reassure us, pinpoint why there is misunderstanding about what we expected and help find the best resolution if a change is needed.

The development of these Best Practices promises to be a reliable way people can know whether their advisor is truly acting in their best interest – A FIDUCIARY.

J. David Lewis, Principal

Fiduciary advocates push alternative approach

Yesterday, in a news conference to announce the Institute for the Fiduciary Standard Best Practices, I may have become a bit vocal when we were talking about how postponing the Department of Labor Fiduciary Rule.  After the call, one of the reporters contacted me for more discussion.  This morning I find myself quoted in a Financial Planning article by Andrew Welsch.

“David Lewis, a Knoxville, Tennessee-based planner, has already been explaining what the best practice to his clients via newsletters, blog posts and social media.

“Whatever the government does in terms of how they define fiduciary, we can always draw the distinction and be relentless about being public about what we are doing. If it doesn’t meet our standards, we can show to our clients how we are overcoming that,” he says.”  Click here to read the entire piece.

J. David Lewis

32 Years of Resource Advisory Services

This is a very important season for me.  On March 15, 1985, at the kitchen table, I signed the documents that created Resource Advisory Services, Inc. The business began operations on May 1 of that year.  Every year since, I remember those days, and that empty $100 a month office, with only a phone jack and RASI’s number to mark my business. I could not believe that I had actually tackled the startup.  Now, I walk through the office space, and cannot believe what has been created.  I stand in awe.  There have been many people who have played incredibly important roles, and there have been experiences that are amazing. Together, we have seen successes and stresses. Close personal relationships have been formed.  Clients have had children and grandchildren. Some have gotten married.  Some have handed over impressive wealth to children, charities, and others.  And, a few clients have died.  I have worked with heirs, as they sorted through the business affairs of a deceased person they truly loved, trying to pull life back together for themselves, and sometimes their children.  Among my clients, I have shared celebrations of unexpected good fortune.  And, I have helped keep people on track as they built wealth slowly over the years.  We have worked through issues, when people’s actions did not produce the results they desired.  It has been “a trip” and I do not know how to show my gratitude in a more meaningful way than this note.  Now, I look to the future with much the same mixture of emotions that I had during the season when I started this enterprise.  I expect to support more financial planners as they get a chance at these experiences for themselves and more clients.  Thank you, for your contribution to all this. 


I first sent these words to “my envelop and paper mailing list” in the early 1990s and still feel the same, especially my gratitude for all those who have helped us, in so many ways, all these years.  Click What to Expect for a description of our client relationships.   

J. David Lewis