Why Financial Advisors Need Cyber Insurance

Financial advisors are second only to law firms as ransomware targets. RIAs, IARs, wealth managers, and CFP-credentialed planners hold detailed financial profiles, account credentials, and authorization to move client funds — making a breach catastrophic for both the firm and the clients.

The regulatory environment compounds the risk. SEC Reg S-P (revised 2024 to require breach notification within 30 days), FINRA cybersecurity rules, and the FTC Safeguards Rule all create direct compliance exposure when an incident happens. A breach without insurance often triggers an examination — and the cost of regulatory response alone can run six figures.

What Cyber Insurance Covers for Advisors

Wire fraud / BEC: the #1 advisor cyber loss — fraudulent wire transfer instructions from spoofed client emails
Account takeover: covers losses when an advisor account is compromised and used to move client funds
Regulatory response: SEC examinations, FINRA inquiries, state securities commissioner investigations
Client notification: required under Reg S-P and 50 state breach laws
Forensic investigation + breach counsel: critical for documenting what happened for regulators
Business interruption: covers lost AUM-based revenue when systems are down

How Much Does Cyber Insurance Cost for Financial Advisors?

Cyber + E&O for advisors typically runs $1,800–$12,000 per year depending on AUM, custodian relationships, and security posture.

Firm Profile	AUM Range	Typical Premium	Coverage Limit
Solo IAR	Under $50M	$1,800 – $3,200	$1M cyber + $1M E&O
Small RIA	$50M – $250M	$3,200 – $6,500	$2M each
Mid-sized RIA	$250M – $1B	$6,500 – $12,000+	$3M – $5M each

Custody firms pay more — having custody of client assets dramatically raises the wire-fraud exposure.

→ Compare cyber + E&O for your advisory firm

Top Carriers for Advisor Cyber Insurance

Chubb is the dominant carrier for mid-sized RIAs and broker-dealers — strong wire-fraud sub-limits and breach response panels with FINRA experience.

Hartford writes solo IARs and small RIAs with competitive pricing and SEC-aware policy language.

Hiscox offers fast, streamlined cyber for solo advisors; pairs with their advisor-specific E&O.

Cowbell brings continuous monitoring of your domain and Microsoft 365 / Google Workspace tenant — useful for advisors who do not have a CISO.

→ See quotes from all four carriers