Colorado is on track to become the first U.S. state to mandate broker-dealers and fund managers to follow certain procedures to minimize the risk of data breaches by cyber-criminals. This development comes on the heels of New York’s cybersecurity requirements for banks, insurance companies, and other financial institutions regulated by the New York State Department of Financial Services, which went into effect this past March.
In light of the global WannaCry cyber-attack, the rising number of advisors breaking away from wirehouses need to place cybersecurity at the top of their list of priorities as they build their practices.
Approximately 65 advisory teams and individuals departed from wirehouses, established RIAs or independent broker-dealers last year, more than triple the number of breakaways in 2013, according to data from DeVoe and Company. The firm attributes this ongoing breakaway surge to the expiration of the many forgivable loans that wirehouses signed in order to retain or add advisors during the financial crisis of 2008-2009. Now that seven years has passed, and these loans are coming due, the advisors who were given these financial packages are considering their options.
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The list of top advisors at the country’s biggest brokerages has changed massively since last year. Breakaway brokers might want to ask themselves three simple questions before they commit to a path. RIAs should not assume the Department of Labor’s impending fiduciary rule will have no impact on their businesses. LinkedIn has a new tool that may improve advisors’ success with prospecting. And there are at least 15 reasons why companies should embrace the cloud.
Wealth management firms relocate to new offices for any number of reasons. One of the most common causes is that RIAs decide to break away from wirehouses. Successful asset managers also inevitably outgrow their startup spaces. Or the firm simply finds a better deal on commercial real estate.
Everybody knows that uprooting a firm to a new office can be a chore, but few business owners think through the implications for the company’s IT system. With a little foresight, moving offices can be the ideal time to upgrade your tech and move to cloud computing. Here’s a step-by-step guide on how to get set up.
This blog post is for those advisors who are contemplating the big move, leaving the big institution behind, and setting up for themselves.
Perhaps you’re joining forces with a small band of like-minded associates, or maybe you’re going it alone. Whatever’s brought you to this point (frustrations with your employers inflexible business model, the limitations of their proprietary solutions, a wish for greater compensation or a better work/life balance) a common factor among entrepreneurial advisors is the desire to start with a clean slate. New RIAs invariably want their operations to be more personalized, more adaptable, and more efficient.
Still on the fence about whether it’s time to switch to a cloud-based IT solution? If you’re like most leaders at elite RIAs and broker-dealers, you want to use the technology that meets all the operational and financial needs of your business, while not putting your firm in security or compliance risk. However few financial experts are also technology experts, so deciding what your firm needs and how much your firm should spend on IT can be baffling.
We urge financial executives to do a thorough cost analysis of how building a robust IT solution in-house compares with outsourcing those needs to an elite provider of secure cloud computing. Look at current actual expenditures as well as those mandatory investments needed to be productive, secure and compliant over the course of six years. That’s how long the average in-house solution lasts before new technology emerges, at which point firms often conduct major IT overhauls.