April 3, 2012

Cloud Computing for RIAs

As business owners and entrepreneurs, you are routinely faced with activities that distract you from your core competencies of managing clients and their portfolios. Many of these activities (managing people, business planning) simply come with running your own business and cannot (or should not) be avoided. Others, however, can be mitigated with thoughtful vendor selection and outsourcing.

Technology clearly falls into this latter category. As you know, AdvisorAssist has always advocated “cloud computing” solutions for RIA clients. (There are a small number of advisors that do have a genuine need for dedicated servers and IT infrastructure but they fall within a small minority.)

“Cloud computing” is simply the use of remote servers located on the Internet to store, manage, and process your data. Connecting to these Internet-based servers eliminates the need for you to purchase, install, maintain, and backup your own servers.

Our rationale is really based on the notion of strategic focus. Your business is wealth management and investment advisory services. Installing and maintaining dedicated servers nudges you into the IT business as well. With the proliferation of service providers that offer inexpensive access to server technology, it becomes more and more logical to outsource your IT infrastructure to those in the IT infrastructure business.

Of course, as compliance consultants we appreciate the importance of privacy and data security for registered investment advisors. The adoption of cloud-based technology does bring with it some additional responsibilities around vendor due diligence and oversight. However, we believe that the time and resources you will save far outweighs these efforts.

We have posted a presentation with some information on cloud computing, specifically dealing with the importance of data security and vendor selection/due diligence for RIAs.

If you haven’t already, we encourage you to consider moving towards a cloud-based infrastructure. If you have any questions on how to implement, please feel free to contact us.


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