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Cloud Technology Blog for RIAs and Broker-Dealers

Why Your breakaway firm needs the cloud

12/1/15 4:47 PM / by Sam Attias

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.

In an industry that more than relies on technology, gaining these freedoms and advantages largely depends on your IT infrastructure. If your RIA is to innovate without compromising compliance or security, cloud computing is far and away the best option. Here are 8 reasons why you should forego the potential turmoil of on-site infrastructure and head straight for the cloud.


1. Building your own IT infrastructure is such a headache

Why put yourself through the trouble and huge upfront expensive of physically installing servers, workstations, back-up, security, software licenses, tech support, etc. Sure, most of the grunt work can be outsourced, but all that tech still has to live in your office and will be your responsibility.

Put your IT infrastructure into the cloud and you’ll gain enterprise-class systems without any fuss. Specialist providers can provide the ideal blend of services you need to get started, with some offering an RIA-ready library of business and financial software so you can adapt as your business develops.


2. You’ll save so much time

Running an on-site IT solution can be a full-time job. With a fully managed cloud solution you can stay focused on your business. You’ll save time thanks to automated upgrades to hardware and software (no need to manage this yourself), the ability to make quick adaptations to your system (rapidly adding and subtracting users, or integrating new software that enables you to extend your range of services), and by avoiding system downtime (thanks to instant failover to a secondary server if the primary one fails for any reason).


3. Compliance and IT security is a breeze

Quite rightly, the Securities & Exchange Commission regulates to ensure your RIA can reliably deliver a minimum level of service and keep client and financial data highly secure. An on-site IT infrastructure requires you to run you own firewalls, back-up systems, anti-virus and anti-malware software, secure file-sharing, business continuity (BC) and disaster recovery (DR) capabilities, ongoing security monitoring and maintenance, and more. The task is so significant that all but the smallest companies have to consider at least part time roles for a Chief Security Officer and a Chief Compliance Officer. 

Cloud eliminates the majority of infrastructure concerns needed to achieved SEC compliance and greatly simplifies the management tasks. Enterprise-class firewalls, back-up, anti-virus and anti-malware is all taken care of automatically. No data is stored locally, so it’s very much harder for it to ever be compromised. Remote servers make BC and DR policies easy to implement. And the best cloud desktop systems provide an audit trail of system access, so irregular behavior is easily spotted. You can even add two-factor authentication for extra protection.


4. Work anywhere and on your own terms

An on-site IT infrastructure will tie you to the office for many of the tasks you need to accomplish, but that’s a thing of the past with the cloud. Each user accesses a personalized cloud desktop (containing all the tools, apps and data needed to do their job) using any Internet-connected device.

With cloud, you and your colleagues can be equally productive using an office desktop or a home laptop. Work can be done while commuting using a tablet or mobile phone. Bad weather needn’t prevent a full day of work. And more time can be spent with clients, sharing live data with them at a meeting or over lunch.


5. No restraints in business growth

With an on-site IT infrastructure, adding a new member of staff requires planning and wiring and software installations. Opening a new office demands you install almost as much hardware as for the first. It doesn’t need to be so expensive and time consuming. With cloud, all you need is a basic computer and an Internet connection. You can add (or subtract) employees to your system in moments. And your new office can be in business just as rapidly. OK, you’ll probably want to create something more permanent than a desk with a laptop, but that’s all anyone needs to get started.


6. Tailored, round-the-clock support

Putting IT into the cloud makes it much easier to manage, but users will still need support. The best cloud desktop providers will include 24/7 telephone support as part of their service; look out for those who also offer account management so that your company benefits from a single point of contact. Remote support is sufficient for most new RIAs. However, if you’re used to having an IT guy down the hallway, some providers will be able to offer local or even in-house physical support either directly or through a network of partners.


7. Predictable, manageable costs

Once you’ve splashed out on an on-site IT infrastructure there will only be minimal maintenance costs, right? Wrong! As the points above make clear, hardware needs upgrading, software needs updating, back-up and security systems need monitoring and upgrading, compliance needs continual attention, and users will need support. Maintenance costs of on-site IT tends to be unpredictable, making it difficult to budget.

A cloud desktop solution wraps all the costs into a straightforward monthly fee per user. If the number is higher than you expect, remember it encompasses enterprise-class hardware, latest software, back-up, security, BC and DR, remote working, 24/7/365 support, assured compliance, plus myriad other service enhancements. Moreover, the fee is predictable and directly related to each user, so budgeting is simple.


8. Get all of the above even faster with an aggregator

By pooling demand across groups of RIAs, aggregators promise more competitive pricing for financial tools and services advisors need as they transition to becoming independent. This alone can be worthwhile, but if you choose an aggregator that has also partnered with a specialist cloud IT provider you can instantly benefit from points 1-7. Usually they’ll be able to get you switched on sooner and sometimes at a keener price due to their economies of scale. It’s definitely worth checking out.

For more information about how External IT supports breakaway advisors seeking to establish a new RIA practice, or if you’re an aggregator interested in partnering, click the button below.


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Topics: Financial Services, Cloud Computing, Breakaways

Sam Attias

Written by Sam Attias

Sam Attias is Managing Director of External IT. He has more than 15 years of experience in the industry including in the areas of Wealth Management, Investment Banking, Fixed Income and M&A.