Envestnet Summary BCP Disclosure 2022
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; Envestnet Retirement Solutions(“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, 2021, Envestnet Wealth Solutions’ platform assets grew to approximately $5.4 trillion in nearly 17 million accounts overseen by more than 108K+ thousand 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 is a leading data aggregation and data analytics provider powering dynamic, cloud-based innovation for digital financial services. Data & Analytics platforms include: Yodlee; Abe.AI; Wheelhouse; and Harvest. Our platforms have fueled innovation in online banking and financial data management for over 20 years. We partner with the largest financial institutions, including 15 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 1,400 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, 50 issued patents, best-in-class data from over 17,000 sources, and our formal agreements with leading financial institutions for responsible and secure management and exchange of data.
Through our parent company we offer these solutions principally through the following product and service suites:
- Envestnet | Enterprise provides an end-to-end open architecture wealth management platform, through which Advisors can construct portfolios for clients. It begins with aggregated household data which then leads to a financial plan, asset allocation, investment strategy, portfolio management, rebalancing and performance reporting. Advisors have access to over 22,000 investment products. Envestnet | Enterprise also offers data aggregation and reporting, data analytics and digital advice capabilities to clients.
- Envestnet | Tamarac™ provides leading trading, rebalancing, portfolio accounting, performance reporting and client relationship management software, principally to high‑end RIAs.
- Envestnet | MoneyGuide provides leading goals-based financial planning solutions to the financial services industry. The highly adaptable software helps Financial Advisors add significant value for their clients using best-in-class technology with enhanced integrations to generate financial plans.
- Envestnet | Retirement Solutions (ERS) offers a comprehensive suite of services for Advisor-sold retirement plans. Leveraging integrated technology, ERS addresses the regulatory, data, and investment needs of retirement plans and delivers the information holistically.
- Envestnet | PMC®, or Portfolio Management Consultants ("PMC") – provides research and consulting services to assist Advisors in creating investment solutions for their clients. These solutions include nearly 4,500 vetted third-party managed account products, multi-manager portfolios, fund strategist portfolios, as well as over 1,000 proprietary products, such as quantitative portfolios and fund strategist portfolios. PMC also offers portfolio overlay and tax optimization services.
- Envestnet | Yodlee™ is a leading data aggregation and data intelligence platform powering dynamic, cloud-based innovation for digital financial services. As an artificial intelligence (“AI”) and data specialist, Envestnet Data & Analytics gathers, refines, and aggregates a massive set of end-user permissioned transaction level data and combines them with financial applications, reports, market research analysis and application programming interfaces (“APIs”) for its customers.
Our firm’s policy is to respond to a Significant Business Disruptions (“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 enterprise-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 & Service departments with critical business processes test plans to ensure that they are workable, in compliance, and that staff are aware of their roles in the event of 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 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 firms that provide financial accounts and transaction information for many of our data aggregation 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. Envestnet continuously refreshes our Information Security Program to align with industry best practices and applicable regulations. Envestnet has implemented a robust Information Security program that leverages elements from NIST CSF, NIST Standards, ISO 27001:2013 and other relevant industry best practices. Under the direction of the firm’s Information Security Officer, the program includes a threat-driven risk-based information security policy and risk management framework, a dedicated security function, while performing independent attestations and internal assurance activities to ensure program alignment.
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. Electronic copies of our plans are located within 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.
Our parent company headquarters is located in Berwyn, PA and our firm, including all subsidiaries, has US offices in Denver, CO; Powhatan, VA; Raleigh, NC; San Mateo, CA; and Sparks, MD. In addition, international locations exist in Bangalore, India; 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.
Yodlee US-based operations exist in Berwyn, PA; Denver, CO; Raleigh, NC; San Mateo, CA; and Seattle, WA. In addition, international locations exist in Bangalore and Trivandrum, India; Brisbane and Sydney, Australia; and London, United Kingdom.
|US Office Locations
|1000 Chesterbrook Blvd, Suite 250
Berwyn, PA 19312
|1801 California Street, 23rd Floor
Denver, CO 80202
|1588 Oakbridge Terrace
Powhatan, VA 23139
|421 Fayetteville Street, Suite 1500
Raleigh, NC 27601
|San Mateo, CA
|999 Baker Way, #100
San Mateo, CA 94404
|53 Loveton Circle, Ste #201
Sparks, MD 21152
|1st Floor, Mercury (2B) Block; Prestige Technology Park
Sarjapura-Marathahalli Ring Road
Bangalore, Karnataka, India 560 103
|London, United Kingdom
|Level39, One Canada Square,
Canary Wharf, London, United Kingdom E14
|333 George St
Sydney NSW 2000 AU
|TC 4/2035-1, Kowdiar Post
Trivandrum, Kerala, India 695003
|Cotton Hill Road, Vazhuthacaud
Trivandrum, Kerala, India 695014
|First floor, Bhawani, TechnoPark
Trivandrum, Kerala, India 695581
Alternative Physical Location(s) of Employees
Envestnet |Yodlee does not maintain specific ‘hot site’ recovery facilities for operational failover. In the event of a significant business disruption (“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 to address not only worst-case scenario in the event of an SBD, but also disruptions of a lesser magnitude. Envestnet maintains stop-gap measures for business continuity, some of which are outlined below:
- To address loss of platform technology, Envestnet and its affiliates have an established presence in geographically dispersed primary and disaster recovery data center facilities for their platform technologies, resulting in the ability to support business out of either facility, should one of these locations be compromised by a natural disaster. Both data centers are hardened with redundant HVAC systems, electrical systems with battery backup and diesel generators, and temperature and environmental monitors. Access to the data centers is secured by cameras and card key access with biometric scanners. Both data centers are staffed 24x7x365;
- To address contingency arrangements for loss of key personnel due to a pandemic or other limited event, Envestnet maintains an Employee Unavailability Plan as a supplemental document to the Firm’s Enterprise, Location-Specific and Departmental Business Resumption Plans. Long-term or permanent arrangements would be made in conjunction with Human Resources Succession Plans.
- To reduce key man risk, most critical Operations & Service departments work in a distributed fashion, meaning that they have multiple locations that perform the same production work. In instances of weather issues or regional disasters, these distributed locations can continue processing, and unaffected Envestnet locations can serve as a relocation point for critical employees should the SBD timeframe be extended;
- All employees are assigned a workplace strategy to be employed in the event of an SBD– work from home; relocate to an alternate Envestnet facility; on hold; etc. In order to support these strategies:
- Yodlee employees have been issued laptops to support working in a remote fashion and utilizing secure VPN capabilities and our web-enabled systems to access our custom platforms to support critical business processes in a remote fashion.
- Periodic testing of these strategies is required for critical Operations & Service departments.
Data Backup and Recovery (Hard Copy and Electronic)
Our firm maintains its primary copy of books and records at its Berwyn, PA; Denver, CO; and San Mateo, offices and 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 as 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 | Yodlee 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 Operational Risk Assessments
Envestnet has an established Risk Management initiative with which we manage our proprietary risk inventory, related controls, mitigation plans, and risk treatment consistent with industry best practices and regulatory guidance. Envestnet risks are reviewed and assessed on an ongoing basis within the organization to support various initiatives and compliance programs including, but not limited to ISO 22301; Sarbanes-Oxley Act (“SOX”); SEC Rule 206(4)-7; Internal Audit; Business Continuity; and Risk Management.
Envestnet’s Risk Management program is facilitated by a cross-functional Risk Management Committee (“RMC”) responsible for supervising the Enterprise Risk Framework of the Company. The RMC, chaired by the Chief Compliance Officer and co-chaired by the Senior Director Business Continuity & Risk, comprises over 40 senior-level management representatives from various disciplines within the firm that meet formally to review, assess and discuss any significant risks or exposure to review the steps taken to minimize identified risks or exposures. The Risk Management program is managed using a corporate risk management tool and facilitated through established policies, procedures, and training that raise awareness and provide a means of reporting and addressing potential problem and risk areas within the organization.
As a public company, Envestnet is required to produce a 10-K each year and file it with the U.S. Securities and Exchange Commission (“SEC”). Risks related to our business are disclosed within the ‘Risk Factors’ section of the 10-K. In practice, this section focuses on the risks themselves, not how Envestnet addresses those risks.
Envestnet’s risk assessments, risk inventory, meeting minutes, and other Committee materials are considered confidential and may not be shared externally.
Envestnet’s Risk Management Program includes the following:
- The RMC meets formally on a scheduled basis throughout the calendar year to review, assess and discuss any significant risks or exposure and steps taken to minimize identified risks or exposures.
- The RMC is responsible for ensuring that sound policies, procedures, and practices are in place for the enterprise-wide management of the Company’s material risks and to report the results of the Committee’s activities to Senior Management and Board of Directors.
- The RMC is responsible for designing and implementing a risk management framework to:
- Provide ongoing guidance and support for the overall risk management framework ensuring that best practices are incorporated;
- Ensuring that risk assessments are performed periodically and that results are communicated to relevant stakeholders, Senior Management, and the Board of Directors; and
- Ensuring that management understands and accepts its responsibility for Identifying Hazards; Assessing and Categorizing the Risk; Evaluating Existing Controls; Recommending Additional Risk Controls; Establishing Risk Acceptance Criteria; and for ongoing Monitoring and Reviewing of Risk.
- The RMC is responsible for executing and monitoring risk management practices and may engage with independent firms as needed
Our firm recognizes that operational risk includes the firm’s ability to maintain communications with clients and to retrieve key activity records through its mission critical systems. In the event of an SBD, we will immediately identify what means will permit us to communicate with our clients, employees, critical business constituents, critical banks, critical counterparties, and regulators. Although the effects of an SBD will determine the means of alternative communication, the communication options we will employ will include our web site, telephone, voicemail, and secure email. In addition, we will retrieve our key activity records as described in the section above, Data Backup and Recovery (Hard Copy and Electronic).
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.
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.
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, and/or locations to ensure that our planning effort encompasses the entire organization. The BIA to reflects on the potential impact from a Financial; Legal / Compliance; Operational; Market Share; Reputational; and Strategic perspective a disruption would have on Envestnet.
Through the BIA, Envestnet has identified critical departments, critical business processes, inter-dependencies and recovery priorities for both technology and resources. 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:
- Building a criticality profile, outlining personnel resource requirements, as well as, mitigation strategies;
- Assessing the potential financial, operational, legal/compliance, reputational, market share, and strategic impacts over several points in time ranging from 1 day to 30 days or more during a significant business disruption (“SBD”);
- Identifying and prioritizing critical business processes and associated Recovery Time Objectives (“RTOs”);
- Providing visibility for upstream and downstream dependencies between critical business processes across the firm;
- Providing visibility for system and technology resources for both internal systems and external service providers;
- Identifying key personnel that support processes in either a primary or secondary role;
- Naming alternate processing facilities where work is processed in a distributed fashion;
- Outlining dependencies on key documents and vital records; and
- Identifying critical strategic partners / third-party vendors required to support our business.
Alternate Communications between the Firm and Clients, Employees, and Regulators
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.
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.
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 has identified dependencies on several key service providers. As a result, Envestnet | Yodlee 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 and 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) , as specified within Envestnet’s Information Security in Supplier Relationships Policy and further supported within Envestnet’s Compliance Manual. Both policies are reviewed during annual, external ISO and Compliance Audits.
Envestnet | Yodlee 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.
The following are examples of our strategic partners; a comprehensive list can be made available upon request:
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.
We have contacted our critical counterparties, such as our disaster recovery providers 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 contact those counterparties directly to make alternative arrangements to complete those transactions as soon as possible.
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 SEGMENT
One Front Street, Suite 1000
San Francisco, CA 94111
Phone: (415) 805-3000
Fax: (415) 291-8584
101 Market Street
San Francisco, CA 94105
Phone: (800) 227-4133
25 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
FBI San Francisco Field Office450 Golden Gate Avenue
San Francisco, CA 94102-9523
Phone: (415) 553-7400
Fax: (312) 8295732/38
Business Continuity tests are completed with critical business resources 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:
- Testing is a major component of the Envestnet Business Continuity Program, tests ensure that plans are repeatable, consistent and that staff are able to fulfill roles and responsibilities;
- The test schedule is created annually in Q4 by BCP Teams. Considerations are made for employee participation and preparedness levels along with the current risks and impacts to the business;
- Success is measured ultimately by achievement of testing objectives;
- As needed, Business Continuity Plans are updated to account for findings and/or feedback received from test participants; and
- Quarterly BCP Reports are provided to management for review and action, as well as, to clients if requested.
Our firm will maintain copies of its BCP, 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. Electronic copies of our plans are located within 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.
The Business Continuity Program is approved 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.
In addition to the annual BCP review process, key areas that trigger review and potential revisions include:
- Business Continuity Plan test results;
- Significant business / location / department changes or incidents;
- Laws & Regulations; or
- Best Practice Guidelines.
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 22, 2022
* Original signature on file in main office