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Don&#39t let data be a disaster

The average cost of data-loss to a small business is £1,700 and

with more than 75 per cent of all businesses that suffer data loss go

out of business within 18 months. The argument to back up data

offsite is becoming an increasingly important one.

The number of IFA firms and financial organisations storing client

data on PCs has never been higher, but there is no financial services

regulation to force advisers to protect their businesses against data

loss.

Some networks insist on members backing up data daily but none

specifies that back-ups must be kept offsite despite the vast

majority of adviser firms having only one office and one electronic

copy of all their client correspondence, research and reports.

FSA managing director Michael Foot recently called for senior

executives to ensure that disaster planning is allocated resources

and priority so it becomes part of business as usual for a firm.

Now the FSA is asking key firms and markets at CEO level how they

measure up against the evidence of best practice identified in its

CP142 review. Guidance to all firms is that they should have

appropriate arrangements to help them maintain the continuity of

their businesses in the event of an interruption.

A joint Treasury, Bank of England, FSA continuity website

(www.financialsector continuity.gov.uk) gives back-up tips and is

designed to ensure that the authorities can communicate in emergency

situations with the key firms and markets which are essential for the

continued working of the City. It also reminds firms that disasters

are not limited to terrorism but could encompass floods, fires and

other less dramatic interruptions to business.

The FSA does not plan a prescriptive approach such as setting minimum

distances between head office and back-up site or requiring back-up

sites to be manned on a more or less continuous basis, etc. What

would happen in the event of an IFA&#39s offices being hit by a

disaster, with paperwork destroyed and no off-site data back-up

available?

Paul Roberts, managing director of Clunk Click, a firm which supplies

offsite data to many IFA firms and DBS members, believes that the IFA

sector is one of the most vulnerable industries for data loss. It has

many small businesses with a limited IT budget and firms are obliged

to hold huge amounts of sensitive data as part of the regulatory

infrastructure.

He says: “Our research has shown that IFAs rely heavily on Zip and CD

drives as a back-up medium, which is concerning, given that these

devices are unreliable and susceptible to corruption. So many IFA

firms exist without any off-site back-up facility, which we believe

should be a legal requirement, not just to protect the firms but also

their clients. You can just imagine the trouble which would be caused

if there was another misselling crisis and no data to support an

IFA&#39s case.”

His views are strongly endorsed by Ian James of IFA Maudlyn Financial

Manage-ment. He says: “Offsite data back-up should be mandatory for

anyone in financial services using computers. Until I used this type

of service, I was unhappy to rely totally on any form of local

back-up. Anyone who has ever had a CD-Rom fail will know the feeling.

Also, like most people, my discipline of following proper back-up

procedures often lapsed – usually the day before I needed it.”

Online backup is widely regarded as a safe, inexpensive and more

efficient solution than traditional onsite back-up solutions such as

tape and CD-Rom, so why is it that, with the costs starting at less

than £7 a month, so few adviser firms have put any offsite

back-up planning on their agenda?

Many firms remain cautious of the security and confidentiality of

their data, claiming that sending information off to an unknown third

party would cause them too much anxiety, particularly where sensitive

client information is involved.

Others argue that as there are no regulatory reasons for doing so,

that current practices with traditional CDs, often stored in a friend

or relative&#39s property off-site, are a much easier solution.

Frank Dolan, principal of IFA firm Laurence Milbrook & Co, says

that he is traditional in his approach and holds copies of all

documents and correspondence in paper form on file. “I also hold

copies of databased correspondence that I issue on disk and then back

it all up to CD. The general principle is that if you cannot produce

a bit of paper to back up what you say happened, the FSA will assume

that it does not exist. Logically, it follows that if you hold info

on disk, back-ups are essential,” he says.

In simple terms, offsite back-up services such as Clunk Click

(www.clunkclick. net/ifa) provide a service that replaces your onsite

back-up solution with an automated web service that encrypts your

date and sends it automatically to an offsite data centre daily.

Other companies offering off-site back-up include DataFort and

NovaStor. All services offer free trials but pricing varies

considerably so check out what they offer and what you need. Datafort

details can be accessed at www.datafort.co.uk and NovaStor at www.

novastor.com.

On a final point, it is worth remembering that a backup is useless

without the ability to restore the data. Whatever you choose, ensure

you run a test to familiarise yourself with the restore process and

choose software to support this which is easy to manage.

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