Segment: Mutual Funds
Publication date: Friday, July 31, 2009
# Pages: (51 pages)

Abstract | Table of Contents

This report assesses the security of private client websites, an issue of paramount importance for all firms throughout the financial services industry. Security is of even more pressing importance for mutual fund issuers, though, as mutual fund client sites have traditionally lagged behind retail bank and brokerage sites in terms of security features.

In looking at each MFM firm, we considered the following aspects of their online security measures:

• Login Process
• Resources
• Security Measures

Performance in this report varied widely. Six firms earned A’s, while four firms earned D’s and two firms failed.

While some firms utilize advanced verification techniques within their login process, we found that many firms fail to fully secure their private client sites. Only four MFM firms use two-factor image verification, and only five separate the username and password entries onto different pages. On the positive side, 83% of firms automatically log users out following a period of inactivity.

Firms generally provided informative Security sections. Of the firms that offer these resources, 64% position them so they are only a single click away from the private homepage. These pages generally provide similar information.

Finally, many firms employ the same security measures. We found that 50% of firms say they use SSL, while 72% claim to use VeriSign to authenticate identities. Eighty-three percent of firms use encryption; while most use 128-bit, one firm uses 168-bit encryption.

The report also includes the following key findings:

• Five firms have updated their login process since January 2008
• Two firms offer deals on anti-virus software

Subjects

Security

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