The Hidden Dangers of Custodian Account Alerts: Why Timely Action Matters

While our clients are always eager to unload a variety of tasks to us here at TOI, one of the most common tasks that advisors are happy to get off their plates is checking the custodian account alerts.

We get it! Logging in to find a page full of alerts can be overwhelming. Heck, just the definition of “alert” is alarming on its own: a state of careful watching and readiness especially for danger or opportunity; an urgent notice.

In the above definition, “danger” may seem like a dramatic word to describe account alerts. While we like to keep things lighthearted, there’s nothing funny about the potential risks lurking in those account alerts, and “danger” is a perfect description. When it comes to keeping your clients’ accounts secure, every alert should be treated as a potential red flag.

You’ve undoubtedly received alerts informing you that a new ACH profile has been established on a client’s account, but did you find the time to follow up with the client in a timely manner to confirm the newly established profile? It’s easy to overlook these alerts in the hustle of your day-to-day tasks, but failing to act on them could lead to significant losses.

New Scam 

We’ve recently learned of a scam involving the infiltration of a client’s email and custodian account portals. This allows scammers to establish an ACH profile on a client’s account and complete unauthorized distributions to the scammer’s bank account. These criminals often go a step further by deleting the email confirmations sent by the custodian to the client or changing the email address on file, ensuring the client never sees the confirmation emails and remains completely unaware of the fraudulent activity. This scam is particularly alarming because it can go unnoticed for weeks or even months, potentially draining the account of large sums before the client or advisor even realizes what has happened.

Note: Schwab has recently made changes to help prevent this from happening. New client profiles no longer have the option to do this by default unless the advisor specifically turns that feature on.

Speaking of account updates, are you following up on those seemingly innocent “Change of Address/Email” alerts? 

At first glance, these may seem like routine updates, but scammers have been known to manipulate such changes for malicious purposes. They can trick the postal service into rerouting mail to a different address. With access to account statements, tax documents, and other sensitive material, they can gather enough personal information to steal the identity of their victim and cause serious financial harm. This kind of fraud is often discovered too late, after significant damage has been done.

Let’s not forget the importance of “Beneficiary Change” alerts

Clients may not always be forthcoming when it comes to significant personal events, such as a serious illness, divorce, or other life-changing circumstances. How can you be certain that someone hasn’t gained unauthorized access to your client’s account portal and updated their account beneficiaries without the client’s knowledge? This could result in someone other than the intended beneficiary receiving the assets upon the client’s death. These changes can occur without the client’s awareness, and without careful monitoring, they can go unnoticed for an alarming amount of time.

Scammers are constantly adapting their tactics, finding new ways to infiltrate accounts and take advantage of any vulnerabilities. Account alerts are an important weapon in the fight to keep your clients’ accounts safe from fraud, but only if they are acted upon quickly and thoroughly.

Total Office can help you manage alerts and protect your clients 

Between managing client relationships, staying on top of investment strategies, and dealing with the day-to-day administrative tasks, it’s hard to find time to go through every alert with the diligence it deserves.

That’s why TOI has developed processes that ensure nothing is overlooked. We have a system in place that monitors, evaluates, and prompts follow-ups on alerts to make sure every potential issue is addressed in a timely manner.

With our support, you can rest easy knowing that we’ve got it covered. You can focus on what you do best—advising your clients—while we help protect their accounts from fraud.


Copyright 2026 Total Office, Inc.
Article credit: Tracey Arp, TOI Account Manager