FTC Safeguards & FINRA
Compliance, Fully Managed.
FTC Safeguards, FINRA, and SEC compliant cybersecurity for accounting firms, broker-dealers, RIAs, financial advisors, and wealth management companies. Full compliance without the complexity.
Financial Services IT Challenges We Solve
per violation penalty
FTC Safeguards Compliance
The updated <a href="https://www.ftc.gov/legal-library/browse/rules/safeguards-rule" target="_blank" rel="noopener noreferrer" class="text-emerald hover:underline">Safeguards Rule</a> is complex. We implement every technical requirement — MFA, encryption, access controls, pen testing — so you're fully compliant.
examination ready
FINRA Cybersecurity
FINRA requires broker-dealers to maintain robust cybersecurity programs. We implement controls for Reg S-P, Rule 4370 business continuity, and FINRA's cybersecurity examination priorities.
compliance managed
SEC Regulation S-P & S-ID
SEC-registered advisors must protect client data under Reg S-P and detect identity theft under Reg S-ID. We build and maintain the policies, controls, and incident response plans you need.
increase in financial cyberattacks
Client Data Protection
Your clients' financial data is a high-value target. We secure it with enterprise-grade encryption, access controls, and monitoring.
compliant archiving
Books & Records Retention
SEC Rule 17a-4 and FINRA record retention requirements demand secure, tamper-proof archiving. We configure compliant email archiving, document retention, and audit trails.
tested & documented
Business Continuity (Rule 4370)
FINRA requires a written BCP. We build and test your disaster recovery plan, backup procedures, and failover systems to satisfy Rule 4370 requirements.
SOC 2 ready
SOC 2 Preparation
We implement the technical controls and documentation you need to achieve and maintain <a href="https://www.aicpa-cima.com/topic/audit-assurance/audit-and-assurance-greater-than-soc-2" target="_blank" rel="noopener noreferrer" class="text-emerald hover:underline">SOC 2</a> Type II certification.
vendor coverage
Vendor Risk Management
Every third-party with access to client data is a risk. We assess, monitor, and manage your vendor security posture per FINRA and SEC expectations.
QI support
Qualified Individual
The FTC requires a Qualified Individual to oversee your security program. We serve as or support your QI with expertise and documentation.
governance managed
AI Compliance & Governance
The SEC and FTC are actively targeting AI misuse in financial services. We help you govern AI tools, prevent shadow AI risks, and document compliance with emerging AI regulations.
Financial Firms We Serve
For RIAs, Advisors & Private Capital
RIA IT Services
Managed IT built for RIAs — custodian integrations (Schwab, Fidelity, Pershing), SEC-compliant infrastructure, books & records retention, and 24/7 support.
Financial Advisors Cybersecurity
Cybersecurity programs for advisory firms — SEC Regulation S-P compliance, threat landscape analysis, audit scenarios, and custodian portal security.
Private Capital & M&A
Cybersecurity due diligence for transactions — secure data rooms, vulnerability assessments, penetration testing, and post-close integration.
Related Resources
Cybersecurity Checklist for Financial Advisors
View checklistHow to Pass an SEC Cybersecurity Audit
Read guideWhat IT Should Cost a 15-Person Financial Firm
Read guideTypes of Cybersecurity
Read articleIT Risk Assessment Checklist
Read articleCybersecurity Threats and Solutions
Read articleFrequently Asked Questions
What does the FTC Safeguards Rule require for IT?
The updated Safeguards Rule (effective June 2023) requires financial institutions — including accountants, tax preparers, mortgage companies, and investment advisors — to implement a formal information security program. Specific IT requirements include multi-factor authentication, encryption of customer data, access controls, regular penetration testing, and designation of a Qualified Individual to oversee the program. Non-compliance can result in penalties of up to $50,000 per day.
Does my accounting or CPA firm need to comply with the FTC Safeguards Rule?
Yes. The Safeguards Rule applies broadly to businesses that are 'significantly engaged' in financial activities — which includes CPA firms, tax preparers, bookkeeping firms, and financial planners. If your firm collects client financial information to provide tax, accounting, or advisory services, you are a covered financial institution under the Rule and must implement all required safeguards.
Who is the Qualified Individual required by the FTC Safeguards Rule?
The Safeguards Rule requires you to designate a Qualified Individual (QI) responsible for overseeing and implementing your information security program. The QI must have the knowledge and experience to do the job, but does not need to be a full-time employee — a service provider can serve this role. Katalism can serve as or support your QI, providing documentation, oversight, and the required annual reporting to your board.
Do financial advisors and RIAs need SOC 2?
SOC 2 is not legally required for most RIAs, but it has become a competitive expectation — particularly when working with institutional clients, custodians, or enterprise accounts who conduct vendor due diligence. SOC 2 Type II demonstrates that your security controls were operating effectively over a period of time, not just documented on paper. We implement the technical controls required for SOC 2 and prepare you for the audit process.
What are FINRA cybersecurity requirements for broker-dealers?
FINRA does not prescribe a single cybersecurity standard but expects broker-dealers to maintain a cybersecurity program commensurate with their risk profile. FINRA's examination priorities consistently include identity and access management, vendor risk management, incident response planning, and business continuity. We implement controls aligned to FINRA's guidance and maintain the documentation examiners expect to see.
How do I meet SEC books and records retention requirements (Rule 17a-4)?
SEC Rule 17a-4 requires broker-dealers to retain certain electronic records in a non-rewriteable, non-erasable format (WORM storage) for defined periods. This applies to emails, trade confirmations, customer account records, and other communications. We configure compliant email archiving and document retention systems that satisfy 17a-4 requirements and produce audit-ready records on demand.
What is a Business Continuity Plan (BCP), and does FINRA require one?
Yes. FINRA Rule 4370 requires all broker-dealers to create and maintain a written Business Continuity Plan that addresses how the firm will continue operating during emergencies. The plan must cover data backup and recovery, communications with customers and regulators, and alternate business locations. We build, test, and document BCPs that meet Rule 4370 requirements and are updated annually.
How do you protect client financial data from cyberattacks?
We implement a defense-in-depth approach: encrypted storage and transmission of all client data, multi-factor authentication on every system, 24/7 threat monitoring, email security to stop phishing and business email compromise, and endpoint protection on all devices. We also conduct regular vulnerability assessments to identify and remediate weaknesses before they can be exploited.
How do you support private-equity firms during mergers, acquisitions, and portfolio company integration?
We work with private-equity firms and their portfolio companies on cybersecurity due diligence during acquisitions, post-acquisition IT integration, and ongoing compliance management across the portfolio. During M&A, we assess the target company's security posture, identify compliance gaps and material risks, and provide a remediation roadmap. Post-close, we rapidly onboard portfolio companies onto a standardized, compliant IT environment — consolidating vendors, implementing security controls, and establishing consistent compliance documentation. This is especially valuable for PE firms operating in regulated sectors where compliance gaps can create material liability.
Protect Your Firm. Protect Your Clients.
Schedule a meeting to discuss your FTC Safeguards compliance and find out exactly where your firm stands.
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