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As seen on solutions-daily.com - February 20, 2007

With the ever-tightening regulations imposed on financial advisory firms (i.e., SOX), it is crucial to maintain an IT solution that can keep your firm compliant and current. At the top of the list is ensuring compliance at lower cost and reduced risk.

Data security, compliance and business continuity are top concerns across many industries. Complicating matters further, the strict, new Federal Rules of Civil Procedure guidelines regarding electronically stored information affect all industries. Therefore, it is crucial that IT solutions keep both compliant and current.

For most businesses, IT accounts for a significant portion of the operating budget. According to a recent study by IDC, support-services spending totaled $1.43 billion in 2005 and that number is expected to reach $2.13 billion in 2010.

In addition to being a large line item, IT is also ranked among the top priorities for senior executives, according to a recent Accenture study. The study reported that “Using IT to reduce costs and create value” was ranked #4 on the list of “Top 10 Current Business Issues for Senior Executives.” In addition, “managing risk” is #1 and goes hand-in-hand with IT reliability.

Financial advisory firm activities and conduct are thoroughly regulated in their role as investment advisers, insurance agents, stock brokers, accountants, and attorneys. Therefore, it is critical that the data they handle is secure, confidential and that all compliance regulations regarding electronic documents are met.

Walter Morales, CEO of Commonwealth Advisors, a financial advisory firm, shared some of his concerns: “When a company's system is disabled, the ramifications are typically confined to that business. However, in the financial services industry, people's wealth is at risk, and the need for disaster recovery is considerably greater. Investment Management is a highly regulated field and has strict record retention requirements surrounding email and other employee communications. Most investment management firms do not service their own technology needs, but do require a secure network that is dependable and consistently operable.”

Mr. Morales concerns reflect those of his industry. Therefore, in order to properly ensure that a company is compliant and secure - and that a business continuity plan is in place - there are important factors to consider when choosing an IT provider that can address the sensitive needs of financial advisory firms.

• Customization. Every business has unique, individual needs. Partner with a flexible vendor that will work closely with you to customize your solution at a predictable fixed monthly invoice that fits your budget. Scalable services that will grow with you are imperative to the growth and success of your business. Getting your service up and running should be painless. Ask about the process- your new vendor should guide you through the switchover -when you're ready - expect to go live in days, not months.
• Complete Security. A data center that delivers the highest levels of security (9999), performance and availability is imperative, as is an SAS70-certified provider. Look for TRUSTe and Safe Harbor certifications which will ensure that your company's private information remains private. Also, find a service that allows the CEO to designate a hierarchy within his firm that dictates who has permission to view certain materials. This is a great way for financial advisory firms to protect sensitive information.
• Reliability. Your provider should guarantee up time. Be sure that their infrastructure and support systems will guarantee that your server and network will operate without interruptions. With remote server management, you should expect your MSP to respond quickly and efficiently to problems through email or voice mail. In the event of a business disruption, your servers, applications, email and website should still be accessible from any remote computer.
• Guaranteed Compliance. Check to make sure that the compliance component satisfies industry regulations and is an integral part of your managed solutions. The solution you select should be easily and seamlessly managed, monitored and administered.
• Empowered Employees. Dynamic tools such as Microsoft Exchange and SharePoint allow you to share information, communicate and collaborate like never before. Be careful to ensure that they will work together safely.

Many financial planning firms are small but have the same needs as larger companies. If you incorporate these five components into your IT strategy, your only concern will be what it should be: your core business.