AI and Your Money: Account Security | Money Matters Podcast

Wes Moss [00:00:03]: Your host, Wes Moss. I like to still talk to humans, but in studio, Connor Miller likes to talk to bots.

Connor Miller [00:00:11]: No, I still prefer humans.

Wes Moss [00:00:13]: I know.

Connor Miller [00:00:14]: I still enjoy the face-to-face interaction like we’re doing right now.

Wes Moss [00:00:18]: Well, the reason I bring this up is that this was the, I would say, topic number one throughout the week. And if I get 2 or 3 emails about something, then maybe it piques my interest. If I get 5 or 6, that probably means 100 people are worried about the same thing. And that’s what happened this week. And I’m going to give, I guess, credit to Clark Howard for this, to continue to alert people to the changing world that has to do with technology and a lack of friction, which is great. And it makes everything easy and we can transfer money and have things set up. And wait a minute, it’s now even easier with artificial intelligence, but wait a minute, maybe it is too easy. And that’s a worry.

Wes Moss [00:00:59]: And that is there. So there are a couple of things that happen. Uh, over the last few weeks that have scared people and makes me nervous too. And I want to address it. It has to do with the bedrock of our financial lives, which are our investment accounts. And a week or so ago, there was a big interview in the Wall Street Journal with the CEO of Schwab. And what the article was about is Schwab, which again, the largest independent custodian for independent advisors on the planet, $7, $8 trillion, massive institution. They came out and said, we are blocking foreign bots.

Wes Moss [00:01:45]: Now, of course, that makes sense. Why wouldn’t you block foreign bots? Well, we live in a world where foreign bots are all the rage. What did Meta just come out with a couple of weeks ago? This cute fuzzy little bot called Muse that everyone seems to love. Muse can book your travel, book your hotels. Do your checking accounts, do stock trades for you, find hotels, anything. But the problem is that evidently if something can find anything, then aren’t we worried that maybe they go a little rogue? Imagine, and I think about this, this is how I think about one of these agents that you give access to your personal life, your calendar. your, your travel plans, and God forbid your bank account or your investment accounts. Imagine you had a super smart 10-year-old kid.

Wes Moss [00:02:41]: I don’t know if you remember Doogie Howser, but I don’t know of a new— Young Sheldon. Isn’t Young Sheldon a genius?

Connor Miller [00:02:46]: Yeah.

Wes Moss [00:02:47]: Imagine Young Sheldon at age 9 or 10, super smart kid, but put him— let’s just say you’ve got this giant semi-truck and it’s a very delicate, important cargo, and it’s got to go from Pennsylvania to Texas, and you throw Young Sheldon in the driver’s seat. How do you think that goes? I think that young Sheldon’s super smart. Maybe he gets halfway there. Maybe he gets all the way there, or maybe he runs completely off a bridge. And that to me is the equivalent of you giving some sort of automated financial, artificially intelligent agent access to your brokerage account. Does that make any sense in the world we live in? The answer is no. So Schwab comes out a while ago and says, look, we’re blocking an outside agent and they’re going to be a lot more of them. It’s not just Muse, not just Meta.

Wes Moss [00:03:44]: There are going to be plenty of these. And they’re saying, no, we’re not going to allow these artificial intelligent bots to access anything in your accounts. They now, ironically, they have their own artificial intelligence. I think it’s called Charlie. Makes sense. Charles Schwab. But at the same time, that article in itself started to scare people. And I got a couple of calls, Connor, that were, wait a minute, does that mean that bots can now go in and drain my account? Well, theoretically, sure.

Wes Moss [00:04:18]: But that’s only if you were to be giving access to a bot that goes into your account, but that’s not what people read. What did people read? They thought, well, if that is a thing, And even if I don’t give access to my own bot, to my own account, to do trades, to move money, doesn’t it mean some other foreign bot can just come on in and do that? And the answer is we have not seen that really happen just yet. Yes, there are a couple instances where bots that were given access ended up instead of moving money or crypto. And there’s a couple of cases where that has to do with cryptocurrency. They erased the cryptocurrency. So that’s scary in itself. These are people that gave access and they were trying to utilize bots, but for the foreseeable future, maybe until the end of time, I don’t see a world where judicious Americans that have saved for 30 years are going to give access to some sort of artificially intelligent agent. to have anything to do that’s serious with their money.

Connor Miller [00:05:27]: Well, and what’s interesting about this, if you remember when the Meta Muse announcement came out, part of the sell, or at least part of the stock reaction was you saw a sell-off in some of the financial services industries.

Wes Moss [00:05:41]: Right.

Connor Miller [00:05:41]: Because you were going to give access to Muse, your bank account information, and they’re going to find you the highest rate of return you can get on your cash. So if Bank of America’s not going to pay me, I’ll move it to Wells Fargo or JP Morgan Chase, or if Schwab’s not going to pay me, I’ll move it over to Fidelity. So you’re saying maybe there’s a disconnect in market reaction and what actual investors feel most.

Wes Moss [00:06:04]: Well, maybe the opposite is true. Maybe the whole idea that it’s so easy that you could give access to one of these artificial intelligent bots running around inside of your PC and in the cloud, The fact that you could do that and then they could go ahead and do something wrong, that to me, I think that scares any investor and I think it should. So I don’t know why anybody would give any access. So it’s almost the opposite. A month ago, these stocks were down because the world thought, oh, Americans are going to let bots run wild, find a better checking account deal, and then move your money from this institution to that institution because this institution pays 3.2 and this one pays 3.4. That’s just not going to happen. Now, maybe for a younger generation that has an ultra-high level of trust with artificial intelligence, maybe if you grow up with this, you’re 16 today, you have your first checking account, or you’re 18. And by the time you’re in your 20s or 30s, you think, oh, no big deal.

Wes Moss [00:07:03]: I’ll just let my bot move money around. I don’t see that happening anytime soon in the real world. It’s too scary. We are in a world that is wonderful when it comes to digital financial technology. It has made the world so much easier. We have now reached a new age in 2024, ’25, 2026 that is making it just too, too, too easy. And the answer to that is that, well, what do we do about it? And here’s the question I get. Wes, I heard Schwab is blocking bots that can drain your account.

Wes Moss [00:07:42]: How can it possibly be safe out there if that could happen? And I’m scared AI will drain my account. That’s what this article prompted. And, and I think it’s a smart fear. It’s a fair question. You hear about an agent, you fake trading bots, account transfer fraud, which you’ve— we— Clark has written about and we’ll address ACAT or automated client account transfer locks that that Clark Howard has been talking about really for the better part of the last year, just did another article about it. And I’ve gotten a bunch of questions about that, but the growing ease of moving money digitally with AI creates an understandable worry. If money can be moved with a few clicks, what happens if some sort of nefarious person uses an automated bot to get into the middle of my transactions? And the answer is this, the more digital the financial world becomes, which I would contend that is today perhaps overly automated, particularly with companies coming out with agents saying, oh, let this agent help with your checking. That’s too automated in my opinion.

Wes Moss [00:09:02]: But the more that happens, where are we going to find safety, security, value? Comes back to humans. The more valuable the human layer becomes and protection and oversight, that to me is the answer here. This is a version— the way I see people staying safe now, moving forward more than they have in the past, is a version of what I would consider— we all know what dual authentication is. You log in and you then have a second step. Maybe it’s a text message. Maybe it’s a, one of these applications on your phone that has a randomized number every 30 seconds. And you’ve got to be able to put that in. That is a huge chunk of progress for keeping people safe, dual authentication.

Wes Moss [00:09:54]: And most of our listeners probably have dual authentication on their financial accounts. And if they don’t, they should. But then what’s the next layer? I think of it needing to be a version of human dual authentication, which is technology and it’s human oversight, which gets back to what Clark’s been writing about and scaring people even more than the automated bot articles that came out in the Wall Street Journal the other day. And that has to do with the idea that Automated. There’s a process called, we call it ACAT in the financial industry, automated client account transfer, where you open an account somewhere where your account is not. And that institution then sends an automated account transfer message to the, to the other institution where they, where the assets are. And then that should in an automated way move the assets from the other firm to the new one. Automated.

Wes Moss [00:10:54]: That’s great. Oh, it makes it easy. What Clark’s talking about is people setting up accounts in your name without you knowing, then submitting automated— these automated transfers and taking money from your institution to this new institution with an account you don’t control. Of course, people are scared about that. And Clark’s been writing about it over and over and over again. Some institutions like Fidelity do allow for a lock So that your account just, that just can’t happen almost like a credit freeze. The problem with that, with other large institutions, the reason everyone doesn’t do it is that it gums up almost all the works and it makes it really hard to move any money anywhere, anytime. If you’re getting a regular paycheck, it stops it.

Wes Moss [00:11:41]: So Schwab, on the other hand, doesn’t offer this, but what Schwab does offer is a human oversight team. So they’ve got digital security. If there’s any sort of account transfer that gets alerted in the system, That gets looked at by, let’s call it a digital layer. Then it has a human team that looks at it. And if there’s something out of place, the human raises a red flag. Then imagine your money is at a firm where you have actual human people that know you, know your family, know your name, know your voice. They’re also watching over. So if something all of a sudden jumps out of nowhere and an account is transferring, Well, guess what? If you have a financial advisor at a registered investment advisory firm, there’s another layer of human oversight that says, oh, wait a minute.

Wes Moss [00:12:30]: I don’t know if this makes sense. To me, that is a second, third layer of human dual authentication. And what does it do in a world of automation, bots, technology, ease? I think today it makes having a human that knows you, and a team that knows you may be more important today than it has ever been, because it is another layer of protection in a very scary automated world.

Connor Miller [00:12:59]: Wes, you know me being an investment guy, not as much interaction on the client account stuff. So I’m sure the audience may have questions like I do. Help me explain what this could actually look like on the existing ACAT setup.

Wes Moss [00:13:16]: All right. Connor Miller has an account at JP Morgan and some nefarious person steals your identity, opens up a Connor Miller account at another institution. You don’t know about it. It’s in a brokerage account. And then they send an account transfer to your account at JP Morgan. And in an automated way, the money leaves JP Morgan into the, into the account in your name, but it’s not you. It’s somebody else that controls it.

Connor Miller [00:13:42]: So they would just have to have my account information to be able to set that up.

Wes Moss [00:13:48]: Which is, that’s probably the super easy part, just an account number. Now they have to match up your name and there’s a lot of, in order to get through a system, everything would have to be to some extent perfect. But that is the worry that Clark has been writing about. Now, have I seen this happen? No, I have not. And perhaps it is because an account movement is a very big deal. I think about wires. So third-party wires have been a big deal. If you get a message from someone, hey, can you wire money to this account? That is a foreign account.

Wes Moss [00:14:26]: And the reason the industry is extraordinarily vigilant around calling and verifying with an actual human, hey, do you really mean to send this wire? Is because that was a big fraud a couple years ago where somebody’s email would get hacked. You’d get an email from someone, hey, can you just send money over here? The industry said, wait a minute, we got to talk to people. Layer of protection, human dual authentication. That really helped that issue. This newer issue that Clark’s talking about is, let’s say, potentially very, very real. We’ve got all these layers of digital checks and balances and everything has to match up. And an account team at the institution where the money is leaving from has to take a look at it. But to me, it just like how the world has started to verify by a human, hey, are you sure you want to send this money? The same thing needs to happen If you have an investment account, you should have someone at the institution that you know, that knows you, that knows your family, that can say this, does this make sense? So that when there’s some big money movement that just comes through as an automated, hey, this is something that needs to be processed.

Wes Moss [00:15:48]: Not every time a, a, a security digital layer may catch it, but a human would catch it. And the only reason a human would catch it is if they know you. And that is, to me, it’s kind of ironic. I was thinking about this this week. Like, here we are in such a— everything is so much easier. Everything is more automated. I think I need a human now more than ever to make sure everything is above board. Everything is kosher and something doesn’t happen that you don’t want to have happen.

Wes Moss [00:16:19]: Human dual authentication. Make sure you know someone. At the firm where your brokerage retirement money resides. More Money Matters straight ahead. After studying thousands of Americans 55 and older, I’ve learned retirement’s hardest part isn’t necessarily the money. It’s the thing nobody warns you about, the sudden lack of purpose. In my new book, The Retire Sooner Method, I break down the 5 things that separate America’s happiest retirees from the unhappiest ones. It’s not just a savings number.

Wes Moss [00:16:53]: It’s a way of thinking about life on the other side. Pick up your copy today on Amazon or your local bookstore. That’s the friendly little green book, The Retire Sooner Method. I know you probably don’t want to keep talking about this, and I want to talk about the Clydesdale economy, which just as a quick preview, the United States economy growing at 7%. Now that’s a nominal number. That is growth. That is real growth plus inflation. I know that, Sounds like a big number, but it is.

Wes Moss [00:17:24]: It’s almost a miraculous number. It’s so big. I mean, we have a $32 trillion economy, 7% on top of that, do the math, is $2.3 trillion of added output in dollar terms on an annual pace. $2.3 trillion in one year of new economic activity, which is business investment, the US consumer, Government spending, net exports. And it’s just, I don’t know that Americans feel, particularly here we are in midterm election season. So all you see is negative ads about everything, no matter what side you’re looking on, how terrible the world is. And think about the weight of this world, war in Iran, oil. We’ve got the continuing war in Ukraine, oil.

Wes Moss [00:18:15]: We’ve got disruptions to energy supplies around the world. oil, diesel. Then we’ve got inflation that refuses to leave the room. The housing market totally stuck. Mortgage rates almost 7.5%. Builder confidence about as low as we’ve seen it in, I think it’s a 14-year low. Interest rates up across the curve. Fed raised rates in September.

Wes Moss [00:18:35]: You got the worry about government borrowing. So you’ve got, and you’ve got AI build-out spending. So there’s more borrowing there. So rates go up and you put it all together. The layer, the icing, I’d say the really scary icing was what we covered, which is the world has just gotten so much easier and more automated. And now there’s these little digital agents running around and just, they’ll take care of everything for you and book everything and move your checking account for you, trade stocks for you. Scratch, record scratch, stop. That’s like the last thing we want to have happen in the world.

Wes Moss [00:19:14]: But I think there’s a reason why we’ve gotten so many questions over the past few weeks about, hey, is my money safe? And we’ll continue to talk about that. But just going back to this US economy before we get back to safety and security in a bot-laden world is that This is a heavy load that I just went through. There are a lot of headwinds, yet at the same time, the US economy’s growing at almost a 7% nominal pace. And it just reminds me every time I’m up in Pennsylvania, Connor, where I’m from, I always go by these Amish farms and you see these, you know, you see these big plow horses. And if you’ve ever seen a Clydesdale, have you ever been—

Connor Miller [00:20:06]: Never.

Wes Moss [00:20:06]: You ever stood next to a Clydesdale horse? These horses averaged about 2,000 pounds. They’re sculpted what seems to be out of marble, but it’s actual muscle. They’re almost mythical creatures if you stand next to one of these, because you being— I’m 6-something and I come up to the bottom of a neck of a Clydesdale. And then there’s another 2 feet, which they don’t really count when they measure horses. So imagine a 6-foot person looking 2 feet up, okay, of pure muscle. And that is what this US economy is. It is so much horsepower that you do not want to stand in the way. And I think about, and you know, an animal like this is that that thing can be going uphill.

Wes Moss [00:20:59]: It can be going uphill through the mud. It can be on a sideways hill. And it’s not going to stop. And that’s to some extent how I’ve been feeling about this economy. If you’re really looking at what’s happening, all of the headwinds and all of the slings and the arrows in this year, yet the Clydesdale just keeps going. 7%, $2 trillion in new economic output. Now, part of that story, to be fair, is that there is a bunch of inflation still. So when you have 3%, 3.5% inflation, that adds to nominal GDP.

Wes Moss [00:21:37]: And inflation is a cost. It’s a headwind for our cost of living, but it’s not a reason to overlook the real economy after inflation that still continues to grow. So this, this very real growth under the hood and the consumer keeps showing up. Real consumer spending up almost 4% annualized pace, second quarter. That continues to be extraordinarily resilient. September retail sales up $745 billion over the past month or so, month over month. It’s just an incredible amount, uh, or that, that’s happened, $745 billion in retail spending over this past month, which is up 6% from a month or so ago. I think about the conference call this week from SpaceX.

Wes Moss [00:22:30]: I’m not recommending the stock here, but they’re throwing out numbers like wanting to have $500 billion to $1 trillion in revenue. This is one company. So they added almost 14 million. They’re at 14 million new subscribers at the end of September. which is up almost $2 million from a couple months ago. They’ve essentially opened up an entire new frontier of where we can do business. It’s called space. Kind of a big area to start getting economic output from.

Wes Moss [00:23:07]: So I just think about how hard it is and how nervous everybody is in the world. And then I think it’s important to stop and understand, hey, wait a minute, Pretty tough to slow down one of these Clydesdales.

Connor Miller [00:23:18]: Well, I think what gets lost is we talk so much about AI and the capital expenditures and how much that’s feeding into economic growth. And that’s real. That is a real mover of the US economy. But I think what we’ve been talking less about, and I’m so glad you talked about the consumer, is the consumer’s almost been forgotten a little bit in this piece.

Wes Moss [00:23:40]: Right. It’s been so much about businesses. Right. Business investment. What are businesses spending? Yes.

Connor Miller [00:23:45]: You don’t get the type of economic growth that we’ve been getting without the consumer, because in any given year, the consumer’s 65%, 70% of economic activity. You don’t get that growth without participation.

Wes Moss [00:24:01]: You make a great point. This is— it’s been— the consumer has been— has gotten great short shrift this year. Nobody talks about the consumer because it’s all about putting AI data centers, all over the country. There’s skirmishes all around the United States. Hey, I want to put a data center here. No, don’t put a data center here in my backyard. Hey, maybe we’ll put them in space. Okay.

Wes Moss [00:24:22]: There seems like there’s a lot of room in space, but that has been the story. And it has not been about how the consumer is doing well. And we know that there’s this wealth effect because the markets have been strong in 2026. And really for the last several years, we also know, and we probably needed a whole hour to go through the brand new Fed consumer, uh, the Survey of Consumer Finances, about 56% of Americans own stock or participate in equity markets, whether it’s a brokerage account or a retirement account. So that’s almost 60% of America has felt a little bit of this, a lot of, or at least some of this wealth effect. And that helps the consumer. On the other end of the economic spectrum, there’s a very dynamic part of this economy that didn’t exist, call it 10 years ago, and certainly not 20 and 30 years ago. And that’s this part, this world of the gig economy, the part-time economy.

Wes Moss [00:25:26]: And I’ve talked about this in the past and gotten pushback. And I’ve heard, Wes, you can’t— well, how can you say this is a good thing if people are doing second and third jobs? And I’m not saying it is a good thing. But it does exist in a very, very major way. The Bureau of Labor Statistics estimates that about 6% of Americans are doing a second gig-type job where they’re bringing in $200, $300, $500, $800 a week extra. Some economists put that at 25%, 25% of Americans that have a second sort of, whether it’s a gig or a side hustle, whatever you want to call it, but extra income. And the opportunity in this economy exists today. And that did not exist in, at least in the same robust way it does today, 10, 15, 20 years ago. So that’s another part of this, why the consumer is holding up.

Connor Miller [00:26:17]: I think the most optimistic piece of this too is we’ve started to see maybe the early signs of some productivity growth in the economy. I mean, if you’re looking out to the future of how can the economy continue to grow beyond the business investment with AI, beyond the consumer, it is this productivity impact from AI and the hope. And look, I think the writing is on the wall that we will see—

Wes Moss [00:26:45]: We think it’s from AI. We think it’s from AI.

Connor Miller [00:26:46]: Yeah. Well, I don’t even know if we’re there yet, but I think in the future, I would say with a pretty high level of confidence, I think ultimately it’s going to drive productivity in the economy over the long run.

Wes Moss [00:27:00]: Well, again, we are starting to see it, but as our Fed chairman says, it’s very difficult to pinpoint anything in particular in this economy because there’s so many— it’s almost an infinitely layered ecosystem that— think about the ocean. I mean, Everything that happens in the ocean on whether it’s off the coast of Portugal or the coast of New Jersey, it all impacts the ocean, but it’s very difficult to connect those dots perfectly. And that’s the size and the dynamic nature of the United States economy. Bottom line, we know it’s moving forward. It’s really, really tough to stop. And this year is a really good example of that. At the same time, you bubble all that up and we go back to what I think really is our topic of the day, which is higher automation, more artificial intelligence, then that means there’s more fear and more threats when you have little bots running around the world that are able to access your calendar, your information, your social media. And God forbid if you were to put a bot in charge of your banking account or your investment account or your checking account.

Wes Moss [00:28:15]: And to me, it’s a very, very clear signal what the Schwab CEO said the other day in the Wall Street Journal, they’re blocking outside agents from being able to access accounts. That in itself scared people, but it makes total sense. I don’t want my financial institution saying, sure, anybody that’s got a bot that wants to play around with the checking account or make trades, that just seems like the most dangerous thing on the planet to me. And I’m glad that institutions are saying no, hey, we’ll, we’ll have our own guardrailed version of artificial intelligence and they’ll be able to do some things, but not have access to our accounts. That makes no sense. Wes, good morning. I just read an article that Clark Coward wrote and he strongly recommends having ACAT locks or account transfer freezes on all brokerage accounts. I’m sure this is something you’re looking at.

Wes Moss [00:29:15]: Just wanted to understand what this means. Here’s my response. And thank Clark. He’s been kind of pounding the table on this for the last really year and just had another article about it. And I got a flood of emails about it. So I thank him for beating the drum on this. This is a very reasonable question. A lot of people are asking about it at the moment.

Wes Moss [00:29:35]: Not every institution allows for these locks. Schwab, which is perhaps the biggest or the biggest independent financial advisor custodian in the world doesn’t allow these transfer lock freezes, but, but, and not every financial institution does, but this is where multi-layers of protection matter and come into play. And I think this is the kind of world that we are going to be— this is how we need to be thinking about protection moving forward. If people can allow for a bot to access their account, make trades, move money, then there’s got to be a whole nother extra layer of security. So one, digital security and the biggest financial institutions, I think, do a very good job of doing this. Strong, unique passwords, 2-factor authentication on every account, alerts for logins, password changes, profile edits, anything that’s transactional. Have an alert for if there’s a transfer or a wire or anything that, that new that gets linked. That’s number one, digital security.

Wes Moss [00:30:42]: Number 2, any major custodian. So this is where the big, big financial custodians give me peace of mind, like a Schwab, like a Fidelity. They have enormous layers of, or they have enormous layers of digital security controls. They have fraud monitoring. They have authentication procedures. And then they have human teams designed to spot activity if it looks suspicious. Number 3, which I think is more important today than ever, is the human layer, which I call human dual authentication. At any advisory firm you’re going to be with, there should be people there that know you, know your family, understand your, your normal patterns, and can pause.

Wes Moss [00:31:28]: When something doesn’t look right. So if a sudden request arrives and says, hey, send a big chunk of money somewhere new or change banking instructions or move an entire account, the right response isn’t simply, oh, the system just says yes and lets it go. No, no, that’s not right. What needs to happen is, hey, a human says, let’s make sure this is really you. In a world that is digitally automated and easy, I don’t know of a time that it’s been more important to have an actual human know you at your bank or at your financial institution, at your brokerage firm. So, something to consider. I love that Clark continues to bring this up. It’s a— this is an important juncture in the world of digital security.

Wes Moss [00:32:17]: And that’s why we wanted to talk a lot about it today. Humans plus technology plus humans plus tech plus humans. Those are the layers we need to keep our money intact. Connor Miller, thank you for being here today.

Connor Miller [00:32:31]: Thanks for having me. As always,

Wes Moss [00:32:33]: you can find Connor Miller. You can find me easy to do so throughout the week at yourwealth.com. That’s Y-O-U-R, Your Wealth. Have a wonderful rest of your day.