Products April 2, 2015

External IT Upgrades Adviser Cloud Desktop

Security enhancements to External IT’s Cloud Desktop improves security, visibility and control by shining a light on the applications and data that advisers access.
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“The Cloud is great,” says Sam Attias, vice president of the financial services division at External IT, especially when it comes to innovation and ease of access. “But right now, everyone doesn’t realize what they’re sacrificing when they use it,” he tells PLANADVISER.

Pre-Cloud-based systems often rested on a series of independent, isolated silos, External IT maintains, increasing the potential for security vulnerabilities and keeping advisers from critical security insights. Who is using which applications? Where are they? When are they using them?

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Data security is easily compromised, Attias says, which led the firm to add a capability clearly showing user activity, tracking login locations, IP address, time of access and which device is used, along with the specific applications launched. Administrators and advisers can view activity while encouraging users to take more responsibility for the security of their own data and the devices they use.

The single, secure place for all applications and data gives users flexibility while firms gain centralized control of sensitive data. 

The Securities and Exchange Commission (SEC) requires firms to maintain a log of any device that advisers use to access firm information. This task was quite easy ten years ago, according to Attias, a simple matter of checking whatever computers were in the office. But in today’s bring-your-own-device world, when information can be accessed on a range of devices and from any location, it is much more difficult.

External IT’s interface creates a log that shows different locations for the user, which can be printed out. The platform also allows sensitive files to be wiped from any device in case of loss or theft.

“As the Cloud becomes the inevitable norm in financial services, advisers’ primary concern is security,” Attias says. “Most would rather sacrifice convenience to keep their data safe. Giving users the freedom to work anywhere, while showing them their own activity, allows them to be proactive about data security rather than waiting for a back office IT professional to notice suspicious behavior.”

Pricing runs between $150 and $200 per user per month. The cost is driven in part by the level of disaster recovery and how much management of the local network, router, firewall and end devices the subscriber chooses. Some types of applications can require a special type of server, Attias says, which are sold separately as a component.

More information about External IT is on their website.

Diversions April 2, 2015

Learning About Money Can Be Family Affair

Bad decisions, debt and for-pay work figure in parents’ new tough-love approach to teaching kids about money, finds T. Rowe Price’s 2015 Parents, Kids & Money.
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The results indicate that teaching kids about money today blends time-honored incentives (such as more cash) with first-hand responsibility for thorny aspects of contemporary personal finance.

“There is some evidence that kids model their parents when learning how to handle money,” says Judith Ward, senior financial planner at T. Rowe Price. And spending habits seem easier to pass from parent to child than saving habits.

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Proving that the apple doesn’t fall far from the tree, “spender” parents—those who identify themselves as spenders—are likelier to have “spender” kids (64%), Ward tells PLANADVISER. Parents who self-identify as “savers” are more apt to have “saver” kids (52%).

“However, what isn’t said or modeled is also important,” Ward cautions. “Kids don’t miss a thing!” The survey found that more than half of kids (61%) think their parents worry about money. And while 82% of parents think they are setting a good financial example, fewer than half (46%) of kids say their parents are doing a good job teaching them about money.

Sometimes, doing the opposite of what parents model turns out to be a good thing. Ward says the survey found that kids can learn from their parents’ mistakes. “In our Family Financial Trade-offs survey, 55% of respondents said they that because their parents are struggling with retirement (or will be), they decided to start saving for retirement early so they won’t end up like their parents,” she says.

Parents want kids to learn about money the hard way, and the survey found that many kids suspect their parents have told them they can’t afford something when they really can (68%), while a smaller group feels their parents use the “do as I say, not as I do” mantra when teaching them about finance (40%). 

Among other findings of the survey:

  • More than half (58%) of parents let their kids make bad financial decisions so that the kids learn from their own mistakes.
  • More than half (52%) of parents believe their kids should have their own credit cards to learn about managing money, and 61% think it’s important for kids to have their own student loans so that they can learn about debt and responsibility.
  • Kids don’t understand credit or loans. Only about one in five (21%) feels knowledgeable about credit, and only 19% feel knowledgeable about student loan debt.
  • Kids also don’t think parents are great teachers. Fewer than half (46%) say their parents are doing very or extremely well at teaching them about money and finances. More than a third (35%) claim to learn more about money at school than from their parents.
  • Most (70%) parents reported giving their kids an allowance in 2015. In 2013, 47% of parents indicated that they gave an allowance.
  • Most (85%) kids who get allowance are required to earn it, compared with 15% of kids who get allowance with no requirements. About half of parents surveyed reported giving their kids $10 or less per week and almost one in 10 parents (9%) gives kids $51 or more per week.

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