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Business Continuity

Envestnet Summary BCP Disclosure 2021

 

Business Description

Envestnet Wealth Solutions empowers Financial Advisors at Broker-Dealers, Banks and Registered Investment Advisors (“RIAs”) with the tools they require to deliver holistic wealth management to their end clients. Wealth Solutions platforms include: UMP; ERS; Tamarac; FolioDynamix; and MoneyGuide platforms. In addition, the firm provides Advisors with practice management support so that they can grow their practices and operate more efficiently. As of September 30, 2020, Envestnet Wealth Solutions’ platform assets grew to approximately $4.1 trillion in nearly 13 million accounts overseen by more than 105K+ Advisors. Services provided to Advisors include: financial planning, risk assessment tools, investment strategies and solutions, asset allocation models, research, portfolio construction, proposal generation and paperwork preparation, model management and account rebalancing, account monitoring, customized fee billing, overlay services covering asset allocation, tax management and socially responsible investing, aggregated multi‑custodian performance reporting and communication tools, plus data analytics. We have access to a wide range of leading third‑party asset custodians.

Envestnet Data & Analytics provided by Yodlee, is a leading data aggregation and data analytics platform powering dynamic, cloud-based innovation for digital financial services. Data & Analytics platforms include: Yodlee; AbeAI; and Wheelhouse. Our platforms have fueled innovation in online banking and financial data management for over 19 years. We partner with the largest financial institutions, including 13 of the top 20 U.S. Banks, garnering 70% of this financial data through structured data feeds and enabling a massive data network associated with tens of millions of consumers. More than 1,000 financial institutions and Internet services companies subscribe to the Yodlee platform to power personalized financial apps and services for millions of consumers. The power of Yodlee and our unique point of difference begins with the massive scale of financial data within our platform which is utilized to fuel Yodlee’s Data Intelligence capabilities. Our unique point of difference also extends to Yodlee’s bank-level security, 80 issued patents, best-in-class data from over 16,000 sources, and our formal agreements with leading financial institutions for responsible and secure management and exchange of data.

We offer these solutions principally through the following product and service suites:

Firm Policy

Our firm’s policy is to respond to a Significant Business Disruption (“SBD”) by safeguarding employees’ health and safety and firm property; making and financial and operational assessments; quickly recovering and resuming operations; protecting intellectual property, books and records; and allowing our clients to conduct business.

Our strategy is to manage an approved corporate-wide Business Continuity Program (“BCP”) to maintain the policy and standards while providing a comprehensive education and implementation process. The objective is to create, document, test, and maintain departmental business resumption plans in order to recover critical systems and functions. At least annually, Operations departments with critical business processes and Technology departments test their plans to ensure that they are workable, in compliance, and that staff are aware of their roles in a business interruption. A corporate communication and management process exist to ensure critical business processes resume quickly, thereby reducing financial risk.

Annually we provide a Summary BCP Disclosure statement via our corporate website or an updated hard-copy version to clients upon request. Our firm creates and documents BCP plans based on the potential risks of disruption to our employees, workspace, and/or technology in each of our critical locations. Our firm provides this through resumption plans at the department, location, and enterprise-levels.
 

Significant Business Disruptions

Our plan anticipates two kinds of SBD, internal and external. Internal SBDs affect only our firm’s ability to communicate and do business, such as a fire in our building. External SBDs disrupt the operations of the securities markets for a number of firms, such as a natural disaster; acts of terrorism; cyber-attacks; equipment of system failures; unexpected loss of a critical service provider / facilities / key personnel; or a wide-scale, regional disruption. Our response to an external SBD relies more heavily on other organizations and systems, especially on the capabilities of Clearing Firms for trade execution for many of our clients.

As cybersecurity incidents have the potential to contribute to an SBD, Envestnet’s Business Continuity and Disaster Recovery planning controls complement the firm’s Information Security practices which have been standardized using the ISO/IEC 27001, under the direction of the firm’s Information Security Officer.
 

Plan Location and Access

Our firm will maintain copies of its BCP plan(s), including the annual reviews and approvals in accordance with our Records Management policy, along with any changes that have been made to it for inspection. An electronic copy of our plan is located on the Fusion Risk Management platform with historical copies maintained on the Envestnet network shared drive within the Business Continuity directory. Additionally, hard copies are kept in each location and safely at BCP leaders’ homes.
 

Office Locations

Our firm headquarters is located in Chicago, IL and has US offices in Berwyn, PA; Denver, CO; Midlothian, VA; Orlando, FL; Powhatan, VA; Raleigh, NC; San Mateo, CA; Seattle, WA; Secaucus, NJ; and Sparks, MD.  In addition, international locations exist in Bangalore, India; Brisbane, Australia; London, United Kingdom; Sydney, Australia; and Trivandrum, India. Some of the above referenced locations are dedicated to specific service offerings provided by other Envestnet entities and thus have separate Business Continuity Summaries to cover individual operations. 

We engage in order taking and entry in Berwyn, PA; Chicago, IL; and Denver, CO.

#

US Office Locations

Address

Envestnet
Platform Support

1

Chicago, IL - HEADQUARTERS

35 E Wacker Drive, Suite 2400

Chicago, IL 60601

UMP
FolioDynamix
ERS

2

Berwyn, PA

1000 Chesterbrook Blvd, Suite 250

Berwyn, PA 19312

UMP
ERS
Tamarac
Wheelhouse
Yodlee
AI Labs

3

Denver, CO

1801 California Street, 23rd Floor

Denver, CO 80202

UMP
ERS

4

Midlothian, VA

15521 Midlothian Turnpike #201

Midlothian, VA 23113

MoneyGuide

5

Orlando, FL

1013 E Colonial Dr

Orlando, FL 32803

AbeAI

6

Powhatan, VA

1588 Oakbridge Terrace

Powhatan, VA 23139

MoneyGuide

7

Raleigh, NC

421 Fayetteville Street, Suite 1500

Raleigh, NC 27601

Tamarac
UMP
Yodlee

8

San Mateo, CA

999 Baker Way, #100

San Mateo, CA 94404

UMP
Yodlee

9

Seattle, WA

701 Fifth Avenue, 14th Floor

Seattle, WA 98104

UMP
Tamara
FinanceLogix
ERS
Wheelhouse
Yodlee

10

Secaucus, NJ

One Harmon Plaza, 6th Floor

Secaucus, NJ 07094

FolioDynamix
UMP

11

Sparks, MD

53 Loveton Circle, Ste #201

Sparks, MD 21152

 

       

#

International Office Locations

Address

Envestnet
Platform Support

12

Bangalore, India

1st Floor, Mercury (2B) Block; Prestige Technology Park

 Sarjapura-Marathahalli Ring Road

Bangalore, Karnataka, India 560 103

Yodlee

13

Brisbane, Australia

Prospect Studios, 52 Prospect Street

Fortitude Valley, Brisbane, Australia QLD 4006

Yodlee

14

London, United Kingdom

Level39, One Canada Square,

Canary Wharf, London , United Kingdom E14

Yodlee

15

Sydney, Australia

333 George St

Sydney NSW 2000 AU

Yodlee

16

Trivandrum, India
(ENV Towers)

TC 4/2035-1, Kowdiar Post

Trivandrum, Kerala, India 695003

FolioDynamix
UMP

17

Trivandrum, India
(Bhadra Towers)

Cotton Hill Road, Vazhuthacaud

Trivandrum, Kerala, India 695014

UMP
UMPi

18

Trivandrum, India
(Techno Park)

First floor, Bhawani, TechnoPark

Trivandrum, Kerala, India 695581

ERS
Tamarac
UMP

 

Alternative Physical Location(s) of Employees

Envestnet does not maintain specific ‘hot site’ recovery facilities for operational failover. In the event of a SBD, Envestnet will move our staff from affected locations to the relevant predetermined workspace failover site assigned to each employee record within their Department Resumption Plan and maintained in our Business Continuity Planning system.

Envestnet’s overall Business Continuity and Disaster Recovery strategies have been designed to complement each other and address not only worst-case scenario in the event of a SBD, but also disruptions of a lesser magnitude. Envestnet maintains stop-gap measures for business continuity, some of which are outlined below

Clients’ Access to Funds and Securities

Envestnet does not maintain custody of clients’ funds or securities; custody is maintained at third-party Custodians designated by our clients. In the event of an internal or external SBD, if telephone, email, or fax service is available, our registered persons will take client orders or instructions and contact our Clearing Firms on their behalf; and if our Web access is available, clients may access their funds and securities by contacting their Custodian directly. Envestnet will provide alternative phone numbers and will make the Custodian contact information available to clients as required.
 

Data Backup and Recovery (Hard Copy and Electronic)

Our firm maintains its primary copy of books and records at its Berwyn, PA; Chicago, IL; Denver, CO; and San Mateo, CA and Seattle, WA offices. Our firm maintains the documents required by Rule 204-2, SEC Rule 17a-3 and SEC Rule 17a-4.

Our firm maintains its backup hard copy books and records through various third-party storage vendors. Hard copy records are sent to offsite storage semi-annually or more frequently if needed.

Our firm maintains its backup electronic books and records through strategic partnerships with various parties for our platform technology and backup vendors. The data vaulting / managed backup service and data center providers, which house our production and disaster recovery sites, are hosted in the United States and do not have direct access to Envestnet data or client Personally Identifiable Information (“PII”). Data center providers only provide physical space, security, and environmental controls; Envestnet owns and manages the equipment within our secured cage. Backup vendors only store data on behalf of Envestnet; Envestnet encrypts data before transmission, vendors do not have access to encryption keys. We have a defined data protection strategy to cyclically back up our electronic records to meet the recovery time objectives of our various mission critical systems.

In the event of an internal or external SBD that causes the loss of our paper records, we will access electronic versions of these records in our various systems and platforms. If our primary site is inoperable, we will continue operations from our backup site or an alternate location. For the loss of electronic records, we will recover the electronic data from our backup records stored in the disaster recovery site, or, if our primary site is inoperable, continue operations from our backup site.

Financial and Credit Risk

In the event of an SBD, we will determine the value and liquidity of our investments and other assets to evaluate our ability to continue to fund our operations and remain in capital compliance. To the extent that we have financing requirements at the time of an SBD above and beyond considerations that are already contemplated through insurance coverage, we will request additional financing from our bank or other credit sources in order to remain in compliance with any applicable capital requirements. If we cannot remedy a capital deficiency, we will file appropriate notices with our regulators and immediately take the appropriate steps.

Mission Critical Systems

Our firm’s mission critical systems are those that ensure prompt and accurate reporting of securities holdings and the processing of securities transactions, including order implementation, reconciliation, comparison, allocation, clearance and settlement of securities transactions, the maintenance of client accounts and the delivery of funds and securities. More specifically, these systems include the custom platforms that support our core business offerings. In addition, our mission critical systems include any corporate applications that support our communication needs surrounding internet, phone, and email.

We have primary responsibility for establishing and maintaining our business relationships with our clients and have sole responsibility for our mission critical functions of order implementation, reporting, billing, reconciliation, comparison and allocation. In addition, we provide execution, clearance and settlement of securities transactions. Our Custodians provide through contract execution, clearance, settlement of securities transactions and the delivery of funds and securities.

Clearing Firms utilized by our client maintain a business continuity plan and the capacity to execute that plan. The Clearing Firms represent that they will advise us of any material changes to plans that might affect our ability to maintain our business and they have presented us with an executive summary of their plans. In the event any of the Clearing Firms execute their plan, the firms represent that they will notify us of such execution and provide equal access to services as its other clients. If we reasonably determine that the Clearing Firm has not or cannot put its plan in place quickly enough to meet our needs, or is otherwise unable to provide access to such services, the Clearing Firm represents that it will assist us in seeking services from an alternative source.

The Clearing Firms represent that backup of our records are taken at a remote site. Each Clearing Firm represents that it operates a backup operating facility in a geographically separate area with the capability to conduct the same volume of business as its primary site. Each Clearing Firm has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing.

Recovery time objectives provide concrete goals to plan for and test against. They are not, however, hard and fast deadlines that must be met in every emergency situation, and various external factors surrounding a disruption, such as time of day, scope of disruption, and status of critical infrastructure— particularly telecommunications—can affect actual recovery times. Recovery refers to the restoration of clearing and settlement activities after a wide-scale disruption; resumption refers to the capacity to accept and process new transactions and payments after a wide scale disruption.

Business Impact Analysis

As a part of Envestnet’s annual review and update of our BCP Program and Plans, Envestnet performs a Business Impact Analysis (“BIA”) to account for any changes in our operations, structure, business, or locations.  The BIA process is supported through our Business Continuity Management Tool, Fusion Risk Management and assists the firm in analyzing the following criteria for each critical business process performed:

Our Firm’s Mission Critical Systems

Order Implementation

Currently, our firm receives orders from clients via the Envestnet Trading platform, email, phone and fax. During either an internal or external SBD we will continue to take orders through any of these methods that are available and reliable, and in addition, as communications permit, we will inform our clients when communications become available to tell them what alternatives they have to send their orders to us.

Clients will be informed of alternatives by email, Envestnet website and/or telephone. If necessary, we will advise our clients to place orders directly with their Clearing Firm or an alternative.

We currently implement orders by sending them to the clients’ Clearing Firm.

Other Services Currently Provided to Clients

In addition to those services listed above in this section we also provide our clients with rebalancing, reconciliation, portfolio management, reporting, overall account information, and the ability to withdraw or deposit funds into their accounts. In the event of an internal or external SBD, we would continue to provide these services through unaffected locations or through our Clearing Firms.

Mission Critical Systems Provided by Our Clearing Firms

Our firm relies, by contract, on our Clearing Firms to provide order execution, order comparison, order allocation, and the maintenance of client accounts and the delivery of funds and securities.

Alternate Communications between the Firm and Clients, Employees, and Regulators

Clients

We communicate with our clients using our platform technology, telephone, email, our web site, fax, U.S. mail, and in person visits at our firm or at the other locations. In the event of an SBD, we will assess which means of communication are still available to us and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. For example, if we have communicated with a party by email, but the Internet is unavailable, we will call them on the telephone and follow up where a record is needed with paper copy in the U.S. mail. In addition, we may also utilize our automated notification system, EverBridge, as a means to reaching select contacts at our client home office locations quickly during an SBD to provide disruption notification, procedures, and contingency arrangements.

Employees

We communicate with our employees using the telephone, email, and in person. In the event of an SBD, we will assess which means of communication are still available to us and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party. We will also employ a call tree and/or our automated notification system, EverBridge, so that senior management can reach all employees quickly during an SBD to provide disruption notification, procedures, and contingency arrangements.

Key Service Providers / Strategic Partners

We communicate with our key service providers / strategic partners using the telephone, email, fax, U.S. mail. In the event of an SBD, we will assess which means of communication are still available to us and use the means closest in speed and form (written or oral) to the means that we have used in the past to communicate with the other party.

Regulators

We communicate with our regulators using the telephone, email, fax, and U.S. mail. In the event of an SBD, we will assess which means of communication are still available to us and use the communication closest to those we have used before the disruption.

Critical Business Constituents and Counterparties

Envestnet follows a formalized a risk-based strategy for performing vendor due diligence and oversight. Envestnet works with the business to identify vendors that support their critical business processes.  Envestnet performs due diligence on the vendor and their service offerings at the onset of the relationship.  The due diligence review is tailored to the specific service provided by the vendor, and typically includes information and physical security, regulatory compliance, business continuity, and enterprise risk management.

For vendor onboarding, the Envestnet Legal department, along with Envestnet’s Information Security Officer, requires that all vendors are subject to strict confidentiality, non-use and non-disclosure restrictions, and that all contracts contain appropriate language to specifically address issues related to Information Security, Data Security, Confidentiality, and Service Level Agreements (as applicable to the specific vendor engagement).

Envestnet defines outsourced/subcontracted work as leveraging a third-party vendor for operational support.  Envestnet does not use outsourced operational support for any of its core functionalities (i.e. software development, technology support, reconciliation activities, client support, etc.).  However, Envestnet engages in strategic partnerships with several third-party vendors to leverage certain capabilities.  These strategic partners do not have access to Envestnet’s data or client PII, with the exception of a Custodian, Clearing Firm, Recordkeepers, and Statement Providers that are used at the direction of our clients

The following are examples of our strategic partners; a comprehensive list can be made available upon request:

Business Constituents

We have contacted our critical business constituents defined as those businesses with which we have an ongoing commercial relationship in support of our operating activities, such as vendors providing us critical services and have determined the extent to which we can continue our business relationship with them in light of the internal or external SBD. We will quickly establish alternate arrangements if a business constituent can no longer provide the needed goods or services when we need them because of an SBD to them or our firm.

Counterparties

We have contacted our critical counterparties, such as our disaster recovery providers, Clearing Firms, and Custodians to determine if we will be able to carry out our transactions with them in light of the internal or external SBD. Where the transactions cannot be completed, we will work with our Clearing Firm or contact those counterparties directly to make alternative arrangements to complete those transactions as soon as possible.

Regulatory Reporting

Our firm’s RIA business is subject to regulation by the SEC and the particular states in which we are registered. We file reports with our regulators using paper copies through the U.S. mail and electronically using fax, email, and the Internet. In the event of an SBD, we will check with the SEC and other regulators to determine which means of filing are still available to us and will use the means closest in speed and form (written or oral) to our previous filing method. In the event that we cannot contact our regulators, we will continue to file required reports using the communication means available to us.

WEALTH SOLUTIONS

SEC Headquarters

100 F Street, NE

Washington, DC 20549

Phone: (202) 942-8088

E-mail: help@sec.gov

SEC Chicago Regional Office

175 W. Jackson Boulevard, Suite 900

Chicago, IL 60604

Phone: (312) 353-7390

E-mail: chicago@sec.gov


Our firm’s Data & Analytics business is subject to regulation by the Office of the Comptroller of the Currency (“OCC”); the Federal Reserve System (“FRS”); and the Federal Deposit Insurance Corporation (“FDIC”). We file reports with our regulators using paper copies through the U.S. mail and electronically using fax, email, and the Internet. In the event of an SBD, we will check with the OCC, FRS, FDIC, and other regulators to determine which means of filing are still available to us and will use the means closest in speed and form (written or oral) to our previous filing method. In the event that we cannot contact our regulators, we will continue to file required reports using the communication means available to us.

DATA & ANALYTICS SOLUTIONS

OCC

One Front Street, Suite 1000

San Francisco, CA 94111

Phone: (415) 805-3000

Fax: (415) 291-8584

FRS

101 Market Street

San Francisco, CA 94105

Phone: (800) 227-4133

FDIC

5 Jessie Street at Ecker Square, Suite 2300

San Francisco, CA 94105

Phone: (800) 756-3558

 

Communications with Law Enforcement / FBI

In the event of a security-related incident which requires assistance from external agencies, Envestnet will communicate with local FBI authorities regarding the nature and extent of the incident.

Below is our contact information for the FBI Chicago and San Francisco Field Offices. The Envestnet Information Security Department will coordinate all communications.

FBI Chicago Field Office

2111 W. Roosevelt Rd

Chicago, IL 60608

Phone: (312) 421-6700

Fax: (312) 8295732/38

Email:Chicago@ic.fbi.gov

FBI San Francisco Field Office

450 Golden Gate Avenue

San Francisco, CA 94102-9523

Phone: (415) 553-7400

Fax: (312) 8295732/38

Testing

Business Continuity tests are completed with critical business resources and BCP Teams at least annually to provide Envestnet Management and our stakeholders with the assurance that the business will successfully recover following a business disruption. 

Below is an overview of Envestnet BCP Testing:

Maintenance

Our firm will maintain copies of its BCP Plan, including the annual reviews and approvals in accordance with our Records Management policy, along with any changes that have been made to it for inspection. An electronic copy of our plan is located on the Fusion Risk Management platform with historical copies maintained on the Envestnet network shared drive within the Business Continuity directory. Additionally, hard copies are kept in each location and safely at BCP leaders’ homes.

Envestnet reviews plans on an annual basis with all owners to ensure plans are accurately maintained and fit for purpose.  At the time of review, business changes and best practices are reviewed and reflected within plans.

Location-specific Business Resumption Plans are reviewed by location level owners and Department Business Resumption Plans are reviewed by department level owners. All Business Continuity Plans are reviewed by the Business Continuity Manager. It is the responsibility of the plan owners to ensure the plans have been reviewed, are accurate and complete.

All Business Continuity Plans are approved by the Chief Compliance Officer and signed off by the Chief Financial Officer, or their designee.

Updates and Annual Review

Our firm will update this plan whenever we have a material change to our operations, structure, business or location or to those of our Clearing Firms.

In addition to the outcome of the annual review process, key areas that trigger review and potential revisions to the BCP include:

 

 

Senior Manager Approval

I have approved this Summary BCP Disclosure as reasonably designed to enable our firm to meet its obligations to clients in the event of an SBD.

By: Pete D’Arrigo
Title: Envestnet Asset Management, Chief Financial Officer
Date: March 17, 2021

* Original signature on file in main office

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