Every RIA and broker-dealer has a privacy policy. But here’s the uncomfortable truth: most policies don’t actually protect the firm, its supervised persons, or its clients from a breach. 

They may satisfy the requirement to provide an annual privacy notice. They may describe how client information is collected and shared. But under the SEC’s 2024 amendments to Regulation S-P, that’s no longer enough. 

A compliant privacy policy must go further. It must demonstrate that your firm has built real safeguards into its operations, that it can respond swiftly to breaches, and that it is protecting both clients and supervised persons with documented, testable policies. 

So, let’s ask again: does your privacy policy truly protect your firm and treat client information safely? 

What the SEC Now Expects from Your Privacy Policy 

The Regulation S-P amendments set clear, enforceable standards for financial institutions: 

• Safeguards Rule → Your policy must address how your firm protects client and supervised person data through administrative, technical, and physical safeguards. Think: encryption, restricted access, disposal protocols, and monitoring. 

• Disposal Rule → Firms must securely dispose of sensitive records when no longer needed — shredding, data wiping, or anonymizing. 

• Incident Response Program → Every firm must have written protocols to detect, contain, respond to, and recover from breaches. 

• Mandatory Breach Notification → Clients must be notified within 30 days of a breach or suspected compromise of their data. 

• Service Provider Oversight → Vendors and third parties must agree in writing to notify you promptly — ideally within 72 hours — if they suffer a breach. 

• Documentation and Recordkeeping → Firms must keep version-controlled policies, incident logs, training records, and vendor files to prove compliance during an SEC exam. 

The Hidden Gaps in Most Privacy Policies 

Here’s where many RIAs and broker-dealers fall short: 

1. No Coverage for Supervised Persons 
   Your policy may reference client data, but does it also protect supervised persons? Employees and advisors handle sensitive data daily, and they’re often the target of phishing and social engineering attacks. 
2. Privacy Notice ≠ Safeguards 
   An annual privacy notice is required — but it doesn’t demonstrate how you prevent unauthorized access or disposal failures. Regulators want evidence of written safeguards. 
3. No Tested Incident Response Plan 
   Without a clear, documented plan, your firm cannot meet the 30-day notification requirement. Regulators will want to see tabletop exercises and response simulations. 
4. Weak Vendor Contracts 
   If your custodians, IT vendors, or service providers aren’t contractually obligated to report breaches quickly, you may find out too late — and still be responsible. 
5. Lack of Documentation 
   In an SEC exam, if it isn’t documented, it doesn’t exist. Training logs, policy version histories, breach records — all must be ready for review. 

How to Tell If Your Privacy Policy Is SEC-Ready 

Ask yourself: 

• Does our policy name supervised persons as well as clients? 

• Does it reference written safeguards, disposal practices, and breach response? 

• Do we have an evidence pack — incident logs, vendor contracts, training records — to back it up? 

• Can we retrieve prior versions of our policies to show annual reviews and updates? 

If the answer is “no” to any of these, your privacy policy is a liability, not a protection. 

Protecting Your Firm and Your Clients 

Regulation S-P demands more than boilerplate. It requires that your privacy policy operationalize protection — for the firm, for supervised persons, and for every client whose trust depends on your handling of their data. 

At LawVisory, we help RIAs and broker-dealers close these gaps by drafting, testing, and documenting privacy and breach policies that are audit-ready and SEC compliant. 

Schedule your complimentary Privacy Policy Gap Assessment today — and be ready when regulators ask: “Does your privacy policy truly protect your firm and your clients?”