New Cybersecurity Laws for Healthcare Will Impact Wealth Advisors Serving the Industry

New Cybersecurity Laws for Healthcare Will Impact Wealth Advisors Serving the Industry 

By CYBER CIC

---

If you have any healthcare-related clients, the 3-minute update below is for you.

The new bipartisan legislation increasing cybersecurity rules for healthcare providers, such as the Healthcare Cybersecurity Act of 2024, aims to bolster protection against cyber threats and ensure compliance with stricter standards for handling sensitive data. Although these laws are designed for healthcare entities, they have potential ripple effects for wealth advisors with healthcare clients.

Here are 5 ways it could impact you:

1. Heightened Due Diligence on Healthcare Clients

Wealth advisors serving healthcare clients, such as private practices or healthcare business owners, might face increased scrutiny regarding data security. This could manifest in:

• New compliance requirements for shared financial or operational information.
• Expectations to demonstrate secure practices when handling sensitive financial data that might intersect with healthcare operations.

2. Collaboration on Risk Mitigation

Healthcare clients may look to their wealth advisors for guidance on integrating cybersecurity strategies into financial planning. This might involve:

• Allocating resources for compliance costs, such as upgrading IT systems or hiring cybersecurity professionals.
• Advising on risk insurance policies tailored to cover potential cyber breaches.

3. Indirect Exposure to Cyber Risks

If a healthcare client experiences a cyberattack, it could have downstream effects on their financial stability, potentially impacting:

• Business valuations or income streams tied to their healthcare operations.
• Investment strategies or liquidity needs for damage control or recovery efforts.

4. Increased Cybersecurity Expectations for Advisors

Healthcare clients subject to stringent cybersecurity standards may prefer wealth advisors with robust cybersecurity measures. You should:

• Review and enhance your own cybersecurity framework (e.g., encryption, multifactor authentication, and secure communication channels).
• Ensure compliance with industry standards, such as state or SEC cybersecurity disclosure rules.

5. Potential for Cross-Industry Regulations

While this legislation targets healthcare, it reflects a growing trend toward stricter cybersecurity oversight across all sectors. Preparing for potential industry-specific regulations ensures you remain ahead of the curve.

To protect your relationship with healthcare clients and mitigate risks, consider aligning your cybersecurity practices with the higher standards now expected in healthcare. Offering proactive support in navigating these changes can strengthen your advisory role.

Wrapping it up

As an Army and Pentagon Cyber War Veteran, my mission is to bring BIG cybersecurity to small-medium business owners.

Cyber CIC assists wealth advisors, attorneys, and accountants in protecting your clients’ non-public private information.

Let us help you protect your business, your growth, and your clients.

Keep cybersecurity boring.

Give me a call at 717.706.3832, or set a time to speak here.