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Protect Against Data Loss: Five Steps to Safeguard Your Firm's Files

Article: AdvisorMax — July 2, 2007

Author: Colleen O’Connor Grant
AdvisorMax
July 2, 2007

Be honest: At what time of day does someone from your office back-up the computer network files?

Advisors who don’t have a quick answer should take this as a warning sign. It’s likely they’re missing easy, yet significant steps in protecting their firm’s files.

Backing-up data files should be routine for advisory firms, yet across the industry it’s unlikely that this function has been designated a high priority, daily role for someone in the office. Such oversight lays the foundation for the most preventable of data loss nightmares.

“Backups are seen as not terribly exciting to do, so it’s relegated to something that happens magically at 2 a.m.,” says Bill Margeson, co-founder and CEO of CBL Data Recovery Technologies . “Awareness is part of human nature and back-ups should be a dynamic process.”

The best strategy a small to mid-sized advisory firm can deploy to protect its data isn’t virus protection. It’s that the office has someone who is interested in and has a vested interest in back-up procedures, Margeson says.

In 2006, CBL, with corporate headquarters in Markham, Ontario and operations in 13 countries, produced a 90% recovery rate for 18,000 projects worldwide. According to Margeson, the most common scenario encountered is the empty directory.

“The [malfunctioning] server comes in and we always ask, ‘where’s the back-up’? Then we receive the back-up and it’s an empty directory,” Margeson says. This situation stems from relegating data back-up to a low priority function. Awareness of the process is lost, Margeson explains, which compounds the original primary cause of the data loss.

Data loss is most often caused by malfunctioning hardware. Other causes include fire, flood or smoke damage and, of course, human error. And while these acts are difficult to prevent against, a comprehensive back-up procedure can make all the difference.

One recent client Margeson worked with executed its back-up religiously, everyday at 5:30 pm. However, no one checked to see if the back-up actually worked. When CBL was asked to recover lost data stemming from a large scale problem, it found that the company’s back-up had failed two years earlier, but no one knew. “This happens more often than you would think. About 40% of people who claim to back up don’t.”

CBL Data Recovery offers these data prevention tips for small to mid-size advisory firms:

1. Make back-ups dynamic and regularly test the backup. Don’t allow this procedure to be passed along as a chore from person to person in the office. This reduced awareness means there’s little incentive to check that the back-up is actually capturing the necessary data, until it’s too late.
2. Don’t purchase off the shelf. Buying off-the-shelf hardware for back-up solutions doesn’t work, Margeson says. Firms in financial services are very different from an architecture company or a graphic design house. “Most of the information financial companies store isn’t their own,” he explains, making data loss especially crippling to this industry. “You need to invest in customized solutions.” And when speaking with a potential provider, make sure to ask how much data can be backed-up during each session and how much time is allotted to do so, Margeson stresses.
3. Don’t reinstall software if the machine makes an unusual sound. This orphans the data, and makes it difficult to retrieve, even for the experts. That sound means its time to throw in the towel and take it to a professional.
4. Small to medium sized firms need to utilize power surge protectors. Period.
5. Don’t store the backed-up files in the same location as the computer network. These files need to be kept in a separate, secure location. After all, odds are that the same fire, flood or burglary that busted the computer system will kill off the back-up as well if it’s in the same location.