Summary BCP Disclosure 2017


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 a financial and operational assessment, quickly recovering and resuming operations, protecting all of the firm’s books and records, and allowing our customers to transact 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 continuity plans 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 exists to ensure critical business functions 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 customers 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 SBDs, 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 or a number of firms, such as a natural disasters, 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.

As cybersecurity incidents have the potential to contribute to a significant business disruption, 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, 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.


Business Description

Envestnet |Retirement Solutions (ERS), a subsidiary of Envestnet (ENV), Inc. (NYSE: ENV), brings investment management and analysis, along with advanced integrated technology to retirement plans. Our mission is to enhance retirement outcomes for the benefit of plan participants by empowering the advisors and the enterprises that serve them. ERS has developed an open-architecture technology solution which combines the proven investment tools, processes, and analytics to meet the specialized needs of each retirement stakeholder.

ERS senior management understands the importance of the services we provide to our clients and that any interruption in service has the potential of severe repercussions to our business partners. As a result of the environment we live and work in, management teams' face increasing regulation and liability surrounding resiliency during any event that can disrupt the business. We aim to identify potential impacts that threaten our organization on an enterprise-level and provide a continuity framework to our employees. The purpose of this framework is building resilience and capability for an effective response mechanism that safeguards the interests of our key stakeholders; reputation; brand; and value creating activities. Business disruptions can range from temporary power interruptions or severe weather to earthquakes, cyber threats, or internal attacks. Whatever the potential disruption, we must be prepared to safeguard our employees, our business and our stakeholders.


Office Locations

Our firm headquarters is located in Chicago, IL and our firm has offices in Boston, MA; Denver, CO; Philadelphia (Berwyn), PA; San Jose, CA; and Trivandrum, India.


Alternative Physical Location(s) of Employees

In the event of an SBD, we will move our staff from affected locations to the relevant predetermined workspace failover site, assigned to each employee record within their Department Resumption Plan 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 a Significant Business Disruption (SBD) but also disruptions of a lesser magnitude. Envestnet maintains stop-gap measures for business continuity, some of which are outlined below:

  • Envestnet has an established presence in geographically disperse primary and disaster recovery data center facilities, resulting in the ability to support business out of either facility, should one of these locations by 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 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, other locations can continue processing, and existing 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 a significant business disruption – work from home; relocate to an alternate Envestnet Facility; on hold; etc. In order to support these strategies:
    • US-based employees currently have or are being issued Envestnet laptops to support work in a remote fashion utilizing a secure VPN capabilities and our web enabled systems to access our custom platforms to support critical business processes in a remote fashion;
    • India-based employees have pre-designated individuals that would relocate to an alternate Envestnet facility and utilize either Disaster Recovery Laptops that are distributed at the time of disaster or VDI interfaces to support work utilizing a secure connection and our web enabled systems to access our custom platforms to support critical business processes; and
    • Periodic testing of these strategies is required for critical Operations departments.

Data Backup and Recovery (Hard Copy and Electronic)

Our firm maintains its primary copy of books and records and its electronic records at its Chicago, IL. Our firm maintains the documents required by Advisors Act Section 204, Advisors Act Rules 275.204-2.

Our firm maintains its backup electronic books and records through strategic partnerships with thirdparties for our platform technology and backup vendors. The data vaulting / managed backup service and data center providers, which house our primary / production and secondary / disaster recovery sites, are hosted in the United States and do not have direct access to Envestnet data or client 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 Assessments

Envestnet’s Risk Management Program is managed within its corporate risk assessment tool, with oversight provided by a cross-functional Risk Management Committee (RMC).

The RMC meets formally no fewer than four times a year to review, assess and discuss any significant risks or exposure and steps taken to minimize identified risks or exposures. The results of the Risk Assessments are confidential and cannot be shared with parties external to Envestnet; however, Envestnet can attest the assessments are performed using best practice standards.

Operational Risk

Our firm recognizes that operational risk includes the firm’s ability to maintain communications with customers 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 customers, employees, critical business constituents, critical banks, critical counter-parties, and regulators. Although the effects of an SBD will determine the means of alternative communication, the communications 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, 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

ERS key applications are those that ensure prompt and accurate reporting of securities holdings and the processing of reconciliation. More specifically, these systems include the custom platforms that support our core business offerings for the ERS Advisor Advantage / Advisor Workstation; ERS Data Integration / Compliance Reporting / Benchmarking; and the ERS Fiduciary Services / Managed Accounts / PMC 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 customers and have sole responsibility for our mission critical functions.

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.

As a part of ERS’ annual review and update of our the BCP Program and Plans, ERS 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:

  • 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.

Mission Critical Systems Provided by Our Strategic Partners

Our firm relies, by contract, on Strategic Partners to provide technology for our platform offering. These strategic partners maintain their own business continuity plan and the capacity to execute that plan. The partners represent that they will advise us of any material changes to the plans that might affect our ability to maintain our business and they have presented ERS with an Executive Summary of their plans. In the event that any of our strategic partners execute their plan, the firms represent that they will notify us of such execution and provide equal access to services as its other customers. If we reasonably determine that the 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 firms represent that backup of our records are taken at a remote site. Each 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 firm has also confirmed the effectiveness of its back-up arrangements to recover from a wide scale disruption by testing.


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

Customers

We communicate with our customers 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.

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 Counter-Parties

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 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, and statement providers:

  • 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;
  • Shredding vendors are supervised onsite and throughout the shredding process;
  • Data feeds are one-way to Envestnet; and
  • Custodians, Record Keepers are known directly to our Clients. Clients enter into a tri-party agreement, thus the Client has the ability to conduct direct reviews and ability to approve the relationship. Additionally, Custodians and Record Keepers are regulated and bound to laws and rules related to data security.

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.

Regulatory Reporting

Our firm is subject to regulation by: SEC. 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 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.

SEC Headquarters
100 F Street, NE
Washington, DC 20549
(202) 942-8088
e-mail: help@sec.gov
SEC Chicago Regional Office
175 W. Jackson Boulevard, Suite 900
Chicago, IL 60604
(312) 353-7390
e-mail: chicago@sec.gov

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 Field Office. 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

Testing

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, our firm will review the BCP annually to modify or update it to account for any changes in our operations, structure, business, or location or those of our clearing firms.

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:

  • 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.

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, our firm will review the BCP annually to modify or update it to account for any changes in our operations, structure, business, or location.


Senior Manager Approval

I have approved this Summary BCP Disclosure as reasonably designed to enable our firm to meet its obligations to customers in the event of a significant business disruption.

By: Babu Sivadasan
Title: Group President, Envestnet | Retirement Solutions
Date: July 4, 2017

*original signature on file in main office