AdvisorVault now includes the custodian feature with its Consolidated FINRA D3P (designated third party) service to give added protection for our withdrawing firms, but essentially adding the Custodian for customers was a walk in the park- I talk about it in this blog.

One 17a-4 Provider for Small FINRA Firms

 

I’ve been getting lots of requests from customers lately, essentially cries for help to meet the Custodian retention rule (for firms that are closing – it appears FINRA wants to have this in place soon). After all, This addition to our D3P service was overdue, and it’s important because regulators could ask for archived electronic records going back 3 yrs. as part of rule 17a-4 – if they wanted even after a firm withdraws from FINRA; adding this feature to our Consolidated D3P Service now gives customers confidence their records will be retained to pass future audits, its included now in our out-of-the-box compliance offering.

What is our Consolidated 17a-4 D3P (designated third-party) Service?

 

The AdvisorVault Consolidated 17a-4 D3P Service is a unique offering we created especially for small FINRA firms and includes everything needed in one turn-key package meeting today’s data compliance demands.

We created our Consolidated product because of the confusion surrounding 17a-4, specifically the retention & supervision of electronic records, for example how does a FINRA firm make the cloud 17a-4 compliant? Specifically, so regulators can access data going back 7 yrs. since by default cloud providers won’t retain data for customers, surely not in WORM compliant format, also what needs to be included in the archive? And what about data on PC’s, in-house servers, Amazon? There’s also Microsoft 365 and Google Workspace with some customers dedicated to Dropbox, ShareFile, Box and other cloud storage products, how are those made compliant?

Customers wanting to use all these different systems invariably ended up with gaps in their 17a-4 archive, essentially our Consolidated D3P Services gives firms a solution to the dispersed data problem, but ultimately confidence when FINRA shows up for their electronic records request (i.e., when they ask for a sample set of data – could be anything – also email or chats going back 7 yrs.)

Benefits of our Consolidated D3P

For Small FINRA firms our Consolidated 17a-4 D3P service has these benefits built-in:

  • ANY DATA; ANYWHERE: To eliminate gaps, the Consolidated D3P Service is able to archive any data from anywhere., the cloud (Microsoft 365, Google Workspace) in-house servers, PC’s all other cloud platforms

  • SIMPLIFIED COMPLIANCE: Gives firms one vendor & single D3P for FINRA/SEC with submission one set of 17a-4 attestation letters

  • CENTRALIZED WEB PORTAL: Single secure web interface to access all records for compliance and supervision and during audits; with a single vendor to rely on to reproduce records when FINRA shows up

  • PRICED FOR SMALL FIRMS: One flat monthly fee including all software & licensing

  • ENSURES AUDITS ARE PASSED: Eliminating gaps in a firms 17a-4 archive/help reduce reproduce records

Adding Another Option for Electronic Records Retention

Traditionally, the three options for electronic records retention for FINRA rule 17a-4

  1. Keep paying full price to retain the data for the required time period
  2. Delete their data and hope for the best
  3. Download it from their storage vendor and retain it themselves hopefully their storage disk
    won’t fail

In the past, when a firm closes, they had three options surrounding their books and records retention after withdrawing their firm– and protecting themselves after the fact if they needed to reproduce electronic records, now they can assign a custodian to retain data (done it at a reduced cost since new data is not added to the archive) adding another level of compliance after the firm closes in case they have electronic records requests 3 yrs. after the fact.

With us they can assign a custodian to retain data since its now included in our Consolidated D3P Service: adding the custodian feature creates a complete compliance offering giving firms one provider for all aspects of data compliance.

Ease of Adapting New Change to FINRA Custodian with AdvisorVault

Since the amendments to the custodian rule in 2019, it’s easier for us to help firms meet regulators demands, specifically, FINRA’s amendment stating the Designated Custodian is required to preserve and produce the Withdrawing Firm’s books and records in the same state in which they were receive, since AdvisorVault has all the features to help the Custodian already built-in: such as storing customer’s records in 17a-4 WORM format, retaining all versions of files, indexing, web portal to access records and download full set of info.

Using AdvisorVault’s service makes sense as the Custodian now FINRA firms can rely on AdvisorVault to retain the records during the period for the Custodian after withdrawal and provide access to the selected Custodian for 3 yrs. In addition, we are able to verify the completeness or accuracy of the books and records the Custodian receives from the Withdrawing Firm. Finally we help with the Custodian letter which the firm send to FINRA.

Summary

I’ve been getting lots of requests from customers lately, essentially cries for help to meet the Custodian retention rule (for firms that are closing – it appears FINRA wants to have this in place soon, Since the amendments to the custodian rule in 2019, it’s easier for us to help firms meet regulators demands, we have all the features to help the Custodian already built-in: 17a-4 WORM format, retaining all versions of files, indexing, web portal to access records and download full set of info.

About AdvisorVault

AdvisorVault is the only FINRA D3P with a Consolidated 17a-4 Service, designed to give small firms everything needed to meet today’s data compliance demands. Our turn-key approach performs the archiving, retention, and supervision of electronic records no matter where they are stored – in-house or in the cloud. Including the FINRA third party letters with all the required documentation. For one flat monthly fee it’s the only fully 17a-4 compliant option – Complete data compliance peace of mind, out-of-the-box.

Allan Lonz, President
alonz@advisorvault.com
direct: 416-985-0310
Toll free: 1-866-732-1407 ex 1