The Many Benefits of a Password Manager
A couple of weeks ago, I told the story of how I was victimized by a thief. Thankfully, I’ve been made whole by my financial institution, but I’m not particularly satisfied with some of the answers I received regarding how the crook convinced the bank they were me.
As it turns out, the bad guy didn’t convince the bank they were me. Rather, they convinced the bank that they were my wife! They spoofed my home phone, which made it appear that they were calling in from my number. With that, they were able to convince the bank to allow access by providing a minimal amount of personal information that could have been obtained anywhere, such as a Facebook profile.
Frankly, the bank in question probably didn’t follow their own security procedures. But if I had taken all of the advice I offered up in “5 Tips to Avoid Being Ripped Off”, it likely would have thwarted the crooks. One of the tips was to use randomly generated passwords that you can store securely in a password management application, such as LastPass. I've found that using a tool like this has other benefits, as well.
As previously mentioned, password managers such as LastPass store your login credentials, but they also offer several other features that can fill gaps in your financial plan. One of those features is the ability to securely share passwords.
Security experts will say that you probably shouldn’t ever share a password, but they would also say not to write down all of them in a place that could be lost, stolen, are eaten by your pet. And sometimes it is just impractical to follow the experts’ advice. Most commonly, it is probably a situation when someone is out of pocket (for me, that may be when I'm at the deer lease where cell phones don’t work) when a need to transfer funds from one account over to another arises.
For these instances, I use a “Families” sharing feature in LastPass. It also allows for easy access to some of our frequently used but less sensitive logins such as movie sites, music, and TV applications for the kids.
Less common, but potentially more problematic, is when one spouse handles most of the financial duties in the household and becomes incapacitated or dies. Loved ones can be left scrambling to access cash or just pay the bills when they have plenty of other things on their minds. Having a secure method of sharing this information can be as impactful as knowing where the safe deposit box key is located.
If password sharing isn’t something you’re comfortable with, you can also designate emergency contacts in the password manager. This feature can apply to all, or just a few key passwords, and allows you to designate multiple emergency contacts with access to different sets of logins only in the event of death or incapacity. For example, for a business you may choose to share work-related passwords with your business partners, while for your personal accounts with a spouse or children.
The emergency contact would still have to request access, which would send you a notification and require your approval. In the event you can’t provide that approval within a designated period of time, the emergency access is then granted.
There are also free form note fields that can be stored in the password manager. These can include instructions to follow, locations of important information, safe combinations, etc. This feature could be especially useful in your estate planning as a secure but centralized location for executors, trustees, or people designated as Power of Attorney to access information necessary to perform their duties.
Perhaps my favorite feature in LastPass is their Security Challenge. It provides a score to help me understand how exposed I may be with the current set of login credentials. It identifies passwords that are compromised, weak, reused, or just old and prompts me to change them. It also offers randomly generated new ones to replace the old ones.
While most of my experience has been with LastPass, there are other password managers out there. I believe that it is well worth everyone’s time to explore your alternatives. Most, including LastPass, have free versions that allow you to familiarize and test drive before committing to a subscription. While some of the features I mentioned are “premium” functions, I think that they are worth every penny.
If you would like to discuss the security of your financial information, get in touch.