March 1, 2012

Verifying online security

QUESTION

I recently read an article in the paper (yes, I still read a daily newspaper) about a couple of websites that claim to analyze a person's various holdings in financial or brokerage accounts. The sites then recommend changes based on performance, risk tolerances and so forth. What bothers me is their need for my usernames and passwords for "read-only" access. Everything in me says no way, but apparently thousands of people are confident and do as instructed. Of course, these sites maintain that my data is perfectly safe. In a world with rampant identity theft, it seems counterintuitive to willingly disclose this information. I'm sure there are some sites that individuals can trust, but how does one verify that the security they promise is real?
-Walt of Port Angeles, WA, listens to my national radio show on KONP 1450 AM.

ANSWER

Excellent question, Walt! And don't worry about reading a daily newspaper; my weekly column appears in newspapers all across the country. I'm glad someone is reading!

Let's talk about your concerns for a bit. Even though it doesn't seem like it, there are actually two questions you brought up, and I'll take them in order.

The first question is why an analysis site might need your usernames and passwords for "read-only" access to financial accounts. The answer is that there's no other way for it to access the information it needs.

The upside is that you won't have to input the information manually and that the analysis company can pull new information as needed.

What the analysis site really means when it says "read only" is that you won't be able to modify any of your accounts via its service. For example, the site may pull your stock information, but you can't buy or sell your stock through the services' site.

Continue on to learn more about financial account security. Don't choose a financial service without reading this. >>

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