How Advisors Can Prepare For Disaster

Hurricanes Harvey and Irma should serve as reminders to financial advisors to have disaster recovery plans, says a financial industry executive.

Living through a natural disaster is traumatic enough, but the recovery can be just as bad if plans have not been made, says Thomas Phelps, chief information officer and vice president of corporate strategy for Laserfiche, a software development company for records management and document protection.

Disaster planning is especially important for financial advisors because of the sensitive nature of the information they deal with. 

“Along with a business impact analysis, advisors should do a risk assessment,” Phelps says. “Identify the assets you need to protect and then determine the threats and hazards that could impact those assets.”

Loss of a building, loss of power and unavailability of key personnel should be planned for, he says.

Information should be stored in the cloud so it is safe and accessible from remote locations. All data needs to be encrypted, including backup data.

“A communication plan should be developed so you know when and how to contact employees, clients and regulators,” Phelps says.

Financial firms can have reciprocal agreements so they can use each other’s space in the event of a fire or other emergency.

“A key mistake many people make is not training new employees as they come on board and not updating plans as a business changes,” Phelps says.

“After plans are in place, do a walk through to see if any changes need to be made.”