Backing up data in the cloud essential to advisers’ disaster-recovery planning

Jon Ten Haagen, a financial adviser with Ten Haagen Financial Group in Huntington, N.Y., has used cloud-based programs for years, but it was the day after Memorial Day when the web-based applications ended up saving his business.

A fire broke out in the office building in which he was renting space, due to a spark from an unspecified cause. Everything from the back wall to his office was obliterated, he said. Metal filing cabinets were melted and twisted. Personal items like a calculator his parents gave him as a child and old photos and trophies of his boat-racing days were gone. His clients’ information, however, was safe — it was in the cloud.

“If I didn’t have it [in the cloud], I would be out of business,” Mr. Ten Haagen said.

Mr. Ten Haagen is currently displaced, working out of an office in neighboring Northport. His clients were all notified of the incident. It only took about 48 hours to get everything back up and running, he said, noting that’s the time it took for his new computer to ship.

Certainly, cloud-based technology is becoming the norm across the industry. Not only does it prove useful in recovering from natural disasters, but it also provides an increased level of efficiency and scalability, said John Rourke, chief executive of Gotham Tech Labs’ Wealthbox customer relationship management (CRM) system.

“It’s getting cloudier — in a good way,” Mr. Rourke said. “We kind of take it for granted now, but it wasn’t too long ago that everyone thought having all your data stored on your laptop was more secure than on the cloud.”

He said that perception has changed, since data stored in the cloud is safer than a hard drive that could be lost in a fire, flood or theft.

The cloud-computing trend will only solidify. According to State of the Cloud 2015 report by Bessemer Venture Partners’ Byron Deeter, 62% of CRM programs will be cloud-based by 2018. The study also found that the cloud computing market will reach $127.5 billion by 2018, growing at a 22.8% compound annual growth rate.

Joe Lukacs, a coach for financial advisers with International Performance Group Inc., said he recommends his clients work — and back up their work and client data — in the cloud. He calls it the Starbucks test: If there’s an emergency and that adviser can work remotely from anywhere, even a Starbucks, then his or her business will be OK.

“You always want to have that disaster-recovery process, but you don’t want to wait [to move to a cloud-based system] until you need it, whether it’s a fire, flood or whatever else goes wrong,” Mr. Lukacs said.

In fact, he suggests advisers purchase their own source of portable Wi-Fi, both for convenience and security reasons.

“I don’t know how you’re going to be in this business today or in five years from now if you’re not cloud-centric,” Mr. Lukacs said. “As an adviser, you don’t want to be in the data business.”