What Should a Financial Advisory Firm Include in a Business Continuity and Disaster Recovery Plan?

A financial advisory firm’s business continuity and disaster recovery plan should explain how the firm will continue serving clients when technology, communications, facilities, or critical vendors become unavailable. The plan should identify critical systems, define recovery priorities, document backup procedures, assign responsibilities, and establish alternate methods for communicating with clients and employees.

Cyberattacks, internet failures, cloud outages, equipment failures, severe weather, and vendor disruptions can all interrupt normal operations.

Why Business Continuity Matters for Financial Advisors

Financial advisory and wealth management firms rely on technology for client communications, financial planning, portfolio management, document storage, compliance activities, and access to custodial platforms.

Even a short outage can affect client service and create operational risk if employees do not know how to continue essential functions.

1. Identify Business-Critical Systems

The first step is determining which systems are required to serve clients and operate the firm.

• Email and communications
• CRM platforms
• Financial planning applications
• Portfolio management systems
• Document storage
• Custodian portals
• Compliance systems

Systems should be prioritized based on their impact on client service and regulatory responsibilities.

2. Establish Recovery Time Objectives

Recovery Time Objective, or RTO, defines how long the firm can operate without a particular system.

• Identify maximum acceptable downtime
• Prioritize client-facing systems
• Document recovery responsibilities
• Define escalation procedures
• Set realistic restoration expectations

Not every application requires the same recovery timeframe.

3. Establish Recovery Point Objectives

Recovery Point Objective, or RPO, defines how much recent information could be lost before the disruption significantly affects the firm.

• Determine backup frequency
• Identify rapidly changing information
• Review cloud application retention
• Evaluate local data storage
• Document recovery requirements

Critical systems may require more frequent backups or additional data protection controls.

4. Protect Backups from Cyberattacks

Ransomware can affect both production systems and poorly protected backup environments.

• Encrypted backups
• Separate backup credentials
• Offsite or cloud storage
• Immutable backup options
• Backup monitoring
• Routine restoration testing

Backup security should be evaluated as part of the firm’s overall cybersecurity strategy.

5. Create Alternate Communication Procedures

The firm should plan for situations where normal email, phone, or office systems are unavailable.

• Emergency employee contact information
• Alternate client communication methods
• Vendor contact information
• Leadership escalation procedures
• Remote work capabilities

Important contact information should remain accessible even when normal systems are unavailable.

6. Include Critical Vendors in Continuity Planning

Financial firms rely heavily on third-party providers, making vendor availability part of business continuity planning.

• Custodial platforms
• Cloud software providers
• Telecommunications vendors
• Managed IT providers
• Compliance vendors
• Data providers

Leadership should understand how a major vendor outage would affect operations and what alternatives are available.

7. Test the Plan Regularly

A written continuity plan should be tested rather than stored away until an emergency occurs.

• Tabletop exercises
• Backup restoration tests
• Remote work testing
• Vendor outage scenarios
• Cybersecurity incident simulations
• Documentation reviews

How Our Compliance Package Helps

Business continuity should be integrated with cybersecurity and compliance management rather than treated as a separate IT project.

• Compliance management assistance
• Risk assessments
• Vulnerability scanning
• Penetration testing
• Business continuity reviews
• Strategic IT planning

Our Experience Supporting Financial Advisory Firms

1-UP IT Consulting supports financial advisors and wealth management firms throughout Frederick, MD and surrounding areas with cybersecurity, compliance management, backup and disaster recovery, strategic IT planning, and ongoing technology oversight.