Storing your financial data the safe way

Your head is a terrible place to store all your family’s important financial information.

How are your spouse and kids supposed to find all your bank and investment accounts and insurance policies if you’re laid up by a serious illness or worse? Account numbers, passwords and user names, due dates for payments of this and that. It’s all vital information that could be inaccessible to your family if you’re incapacitated or, let’s get real, dead.

The answer may lie in a new crop of software products designed to be a sort of electronic safety deposit box for your vital financial information. Protected by password and encryption, the information remains accessible on your computer or online to you and other people chosen by you.

The fact that we’re doing more of our financial transactions over the Internet makes this kind of software especially useful. If you’re a self-serve online customer, you may not have a go-to person at your bank to call in case of emergency.

And then there’s the fact that we’re spreading our business around and thus increasing our record-keeping needs. It’s not out of line to imagine someone having a chequing account, savings account, mortgage, retirement savings account, tax-free savings account and insurance all at different financial institutions.

A while ago, I asked people on my Facebook page about their interest in a product like this and many were enthusiastic. But several people were extremely wary of hackers, fraudsters and other types of online trouble-makers. Could they get access to your data and use it to rob you?

Not to worry, says the head of Estate Vault, a document and data storage service that has a head office in Nevada but is run out of Canada.

“Everything is encrypted using blowfish algorithm, which is beyond military grade. All the financial institutions use it,” said Boyd Soussana, CEO of Estate Vault.

Estate Vault is simple but unavoidably tedious to use. You have to go through each aspect of your financial dealings to find account/policy numbers and contact names. If you want, you can also scan in actual documents, say a page from your life insurance policy with all the important particulars.

The data can be stored on your desktop, online through the servers the firm has located in Ottawa or on a USB key. Wherever you store the information, the encryption scrambles your data so that it can’t be read by hackers, Mr. Soussana said.

Cautious users can take extra security steps by limiting the amount of information they provide, he added. For example, you might put the location of your bank and the name of your account rep, but not your chequing account number.

“You only put down what you feel is secure,” he said.

Most people won’t feel secure including their passwords, and user names along with their passwords, which is why Estate Vault’s forms don’t include this information. Instead, it’s suggested that you create a list of PINs, hide it, and then disclose its location in your vault.

“Create a PIN booklet, stick it in a drawer and if someone needs to find it, there it is,” Mr. Soussana said.

Estate Vault is marketing its product through financial planners and big investment firms that in turn give it to clients (ask your adviser about it). According to its website, you can buy Estate Vault direct at a cost of $199.99 in the first year and $129.99 for each subsequent year.

Other products in this category include InfoSafe.com, which comes in a desktop version for $49.95 (U.S.) and an online edition that costs this same amount on an annual basis. Take advantage of the free trial with this product to see how it works for you. Financial nomenclature south of the border is just different enough to complicate the process inputting all your account information.

Estate Vault allows you to store medical and estate information (like your will) as well as financial information. The packaging of all a family’s vital information in one spot is ideal not only for everyday use, but also for trips where parents might be leaving their children with a relative or caregiver. Another use is as a resource to help you replace credit cards and documents if you lose your wallet.

Mr. Soussana said there’s a huge potential market for electronic financial data storage, but it’s uncertain if it will ever become as popular as tax software. That’s probably the most widely used financial software product right now.

Security concerns are one limitation. Another, according to Mr. Soussana, is the serious time investment needed to make these products work.

“People are inherently lazy,” he said. “The biggest challenge is to get someone to sit down and start putting information into it.”

Storing Your Data

How financial data storage software works:

1. Find account numbers, addresses and contact names for all the financial firms you deal with.

2. Create a user name and password and decide who will have access to it.

3. Input all your information

4. If you want, scan in key documents like insurance policies.

5. Choose whether you want to store your data on your computer, online (protects you if your computer dies) or on a USB stick.

6. Ensure access information for your info is available to those who might need it if you’re incapacitated.