Disaster Recovery For RIAs: Lessons (And Photos) From The Surreal Aftermath Of Hurricane Sandy Hot

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The Disaster

On one side of our backyard, two 50-foot tall trees cracked in half.  One leans against a power line to a neighbor's home. On the other side of the yard, a tree on our neighbor’s property leans against the fence separating our lots, touching the power line to her home.


The subdivision (neighborhood) we live in consists of about 1,200 homes and I might know 10% or 15% of the residents. One couple, we're friendly with had a tree crash through a bedroom at the height of the storm. No one was injured. They fled with only the clothes they were wearing, fearing the entire home was about to collapse. Today, my wife, Mindy, received a text saying the home was a total loss and must be rebuilt.



Downed trees and power lines are everywhere. The storm began Sunday evening and peaked Monday night. Mindy and I played Monopoly with our daughter, Alison, 21, and her boyfriend, Jordan, and we never felt scared, even as the wind gusts of about 75 miles per hour howled. Tuesday morning, trees blocked roads and power lines were down every few blocks in this community and throughout much of Long Island.


Forty-eight hours after Hurricane Sandy made landfall about 50 miles south, major streets in this densely populated suburban sprawl remain closed from traffic. Traffic lights at major intersections throughout Long Island still are not working. Amazingly, drivers are stopping at darkened intersections and looking out for each other. These aggressive Long Islanders, half of whom commute to Manhattan's tough streets every day, are behaving with civility. 


Advisor Products employs a full time IT Manager with about 15 years of experience, who is responsible for maintaining the 1,000 or so websites we host for advisory firms and their 50,000 client portals. He's supervised by a systems engineer with about 30 years of experience. They take our obligation to RIAs and BDs seriously and know advisors must have a disaster recovery plan, and they spend hundreds of hours every year preparing us for a disaster. Still, imagining such a disaster could happen — never mind planning for it — is a huge stretch.


I never thought we could be so disrupted by weather.


Our Disaster Recovery Plan

All websites and client portals hosted by Advisor products are on servers located nearby in an SAS 70 data center. Our disaster recovery plan for hosting websites has worked as planned. The hosting facility lost power, but gasoline-powered generators kicked in and contracts with local fuel companies ensure continuity of service.


Advisor Products internal software systems for operations are probably not very different from those at many advisory firms. The main systems we need to run our business is our phone system, CRM, network file server, and Microsoft Exchange. The CRM system is a Web-based application but we need Microsoft Exchange for email and access to files hosted on our local network server and the phone PBX is a VOIP phone system, which we host at our Jericho office.All of these systems are set up for remote access over the Web from employee's homes.


Trouble is, there is no power to our office building, which houses 15 or 20 businesses. So no one can access our systems remotely -- even if they had power and Internet.


When it became obvious that power to our office would not be restored quickly, the other part of our disaster plan kicked in: we moved the servers with Exchange, network files, and our phone system to our hosting facility. Physically moving the hardware and rebooting everything at the hosting facility took about six hours yesterday. It worked as planned! Now we can conduct business using all our internal operational software.


The one thing that has not gone as planned is that several employees have no cell-phone service or Internet. So even though our phone, email and CRM systems allow for staff to work remotely, they cannot log in from their homes because this disaster is so widespread across Long Island. To be honest, that was a bad surprise.


A staffer in Florida who always works remotely on client service was able to answer the phones and emails from clients or prospects. In addition, one employee who lives in Queens was able to access everything.


And so here I am in a banquet room in Queens, where we have temporarily moved our office. Just over the border from Nassau County, we rented space at a hotel. And herein lies the lesson for advisors.


Just because you’re set up to work remotely does not mean people will actually be able to log in from your surrounding area. So plan to set up an agreement with other advisory firms or businesses 10, 25, and 100 miles away, where you can set up your staff to work after a weather event or some other unimaginable disaster.


While members don’t use it, A4A allows advisors to connect with each other. I actually set that up because I envisioned advisors might want to connect to find disaster recovery sites. We disabled the feature two years ago or so because no one used it. If you would like to connect with a disaster partner, let me know and we’ll establish a forum for advisors to connect to disaster recovery partners.  




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