Financial services risk is pervasive and can hit a business from many angles. This is compounded by the fact that financial services professionals, such as accountants, bookkeepers, and tax preparers largely underinsured against the risks they face. To find out more about their concerns, we recently conducted a study of accountants, a linchpin of the financial services industry. We uncovered issues ranging from wrongful termination suits to malicious AI and more.
In this article, you’ll learn more about the data we’ve collected, and the risks facing financial services professionals. But, one thing is clear: accountants, bookkeepers, and tax preparers, just like other businesses, need protection that, unfortunately, has been difficult for them to access.
Avoid Errors or Pay the Price
Financial professionals handle a large volume of private financial data, making errors costly. Close to half of accountants (46%) admit to making mistakes, and of those who have erred, 72% reported that either they or their company were held financially responsible for the errors.
Despite these errors, many accountants are confident that the mistakes they do make are minimal, and 71% will go as far as to say that they’re prepared for a financial audit by the Public Company Accounting Oversight Board (PCAOB). Even with this confidence, accountants shouldn’t carry the weight of their company on their shoulders.
Without the proper insurance policies, accountants, bookkeepers, tax preparers, and other financial services professionals can be held liable for their mistakes, putting their jobs, companies, and clients at risk.
Fewer Jobs = More Stress
In 2023, news of layoffs plastered the front pages, leaving many accountants fearful they could be next. More than half of accountants (54%) are concerned about layoffs. According to Brad Barkin, VP of Law and Accounting Practice at Embroker, accountants have little reason to be worried in 2024, even as organizations in other industries continue to downsize.
“Many big accounting firms have performed layoffs this year, but this isn’t new. Based on the economy, we’ve seen bigger firms shrink their workforce in the past, and we may continue to see big accounting firms lay people off in the future,” stated Barkin. “Talented accountants will always have job security.”
WFH is Leaving Financial Services Professionals Vulnerable
Finance is now more digital than ever, and the number and sophistication of cyber attacks continue to increase. Financial professionals must be more cautious with personal and professional financial information than ever before, especially those who work from home.
A majority of accountants believe that if there were a cyberattack on their business, their clients (35%), their own (34%) and their company’s (23%) financial information would be at risk. While completely avoiding cyberattacks may not always be possible, implementing measures to mitigate the threat is crucial.
According to our survey:
Businesses consistently view cyber threats as a top worry; however, accountants tend to avoid open conversations about cybersecurity, with 46% indicating rare to nonexistent conversations with leadership on the topic. Companies who neglect discussing, addressing, and safeguarding against these risks may find themselves in compromising positions.
Financial Services Risk: Unique Coverage for the Underserved
Insurance for financial services professionals is often treated like an afterthought in the industry, and insurers often misunderstand accountant and financial services risk. Underserved by the bigger firms and legacy players in the industry, financial services professionals are looking for insurance policies that can cater to their needs and are reliable in the face of growing and emerging risks.
What’s alarming is that 34% of respondents report having a standalone cyber policy with only standard coverage, while close to one-third have no idea what type of coverage they have. Accountants and other financial professionals are trained to be knowledgeable about business and risk, yet they’re being left in the dark.
Using this survey data and our ongoing market research efforts, we are happy to announce the release of our newest insurance programs developed specifically for financial services professionals. We are excited to provide accountants, bookkeepers, and tax preparers with foundational policies that address their professional liability, cyber, and general business risk needs.