Beyond Business Continuity: Operational Resiliency as a Competitive Advantage

What Is Operational Resiliency in Wealth Management?

In today’s rapidly changing environment, wealth management firms are under increasing pressure to ensure uninterrupted service delivery, protect client assets, and adapt quickly to unexpected disruptions. This is where operational resiliency comes into play.

More than just a buzzword, operational resiliency represents a firm’s ability to prepare for, respond to, and recover from events that could threaten its operations, clients, or reputation.

Understanding Operational Resiliency

Operational resiliency refers to a firm’s capacity to continue delivering essential services during and after a disruption, whether the cause is internal (like a system failure or human error) or external (such as a cyberattack or natural disaster). It encompasses more than business continuity and disaster recovery—it’s a firm-wide approach that integrates risk management, technology, vendor oversight, and communication.

In the wealth management industry operational resiliency is critical. Advisers, reps and clients alike expect consistent access to financial accounts, timely reporting, and real-time updates—regardless of the conditions behind the scenes.

Why Operational Resiliency Matters in Wealth Management

Operational resiliency is more than a regulatory requirement—it’s a strategic differentiator for broker-dealers and Registered Investment Advisors. In an industry where trust, responsiveness, and continuity are paramount, firms that can maintain seamless operations during disruptions set themselves apart. A strong resiliency framework protects client assets and data, minimizes downtime, and reinforces confidence in the firm’s ability to manage risk. It also demonstrates preparedness to regulators and institutional partners, positioning the firm as a reliable and forward-thinking player in the market.

Protecting Client Trust

Clients entrust advisors with not only their assets but also their personal information and financial futures. Any disruption—from a prolonged system outage to a data breach—can erode this trust. A resilient firm demonstrates its commitment to protecting clients, no matter the circumstances.

Navigating Increasing Complexity

Wealth management is more complex than ever, with digital platforms, hybrid workforces, and evolving regulatory requirements. Operational resiliency helps firms adapt to change, respond to unexpected challenges, and maintain service quality.

Meeting Regulatory Expectations

Regulators have emphasized the importance of operational resiliency. SEC Exam Priorities and FINRA’s annual regulatory updates and risk alerts repeatedly identify business continuity, cybersecurity, and operational integrity as high-priority areas during exams.

Key Components of Operational Resiliency

To build operational resiliency, wealth management firms must focus on several key components:

Business Continuity and Disaster Recovery (BCP/DR)

These foundational elements ensure a firm can maintain or quickly resume critical operations during adverse events. Business continuity planning includes identifying essential processes and personnel, while disaster recovery focuses on restoring technology and data systems after disruption.

FINRA Rule 4370 requires broker-dealers to create and maintain a written business continuity plan (BCP). This plan must address key areas such as data backup and recovery, alternative communication methods, relocation of employees, and critical business constituent relationships.

The rule also mandates that the plan be reviewed annually and disclosed to clients.

Technology Infrastructure

An up-to-date and secure technology stack is crucial. This includes cloud-based solutions, redundancies for critical systems, data backup protocols, and scalable platforms that can handle spikes in usage or transitions to remote work environments.

Cybersecurity Preparedness

With cyber threats becoming increasingly sophisticated, operational resiliency requires a robust cybersecurity program. This involves ongoing monitoring, employee training, threat detection, and response protocols to safeguard client information and assets.

In 2022, the SEC proposed Rule 206(4)-9 under the Advisers Act, which would require RIAs to adopt and implement written cybersecurity policies and procedures. As of June 2025, this rule is still being finalized. The SEC has also released multiple risk alerts highlighting weaknesses in cybersecurity programs and emphasizing best practices around incident response, access control, and vendor management.

Third-Party and Vendor Risk Management

Wealth managers rely on a network of custodians, technology providers, and service vendors. Operational resiliency involves evaluating these relationships, ensuring vendors have their own resiliency plans, and incorporating oversight into ongoing risk assessments.

According to 2025 FINRA regulatory guidance, firms have an obligation to establish and maintain a supervisory system, including establishing and maintaining written supervisory procedures for any activities or functions third-party vendors perform, that is reasonably designed to achieve compliance with applicable securities laws and regulations, including FINRA rules (e.g., FINRA Rules 3110 and 4370).

On October 26, 2022, the SEC issued a proposal seeking feedback on new minimum due diligence and monitoring requirements for investment advisers who outsource certain covered services.  If approved, the compliance date would be 10 months from the rule’s effective date.

Regulatory Compliance

Regulators—including the SEC and FINRA—are increasingly focused on operational resiliency. Firms are expected to document and test their resiliency plans, assess third-party risks, and demonstrate that they can continue providing critical services during disruptions.

Reg SCI (Systems Compliance and Integrity), while primarily targeting larger market participants, underscores the SEC’s expectations for operational integrity, business continuity, and robust risk controls.

SEC Examination Priorities often cite business continuity, information security, and operational resiliency as key focus areas.

Building a Culture of Resiliency

Operational resiliency is not just a one-time exercise or a set of documents—it’s a mindset that should be embedded in a firm’s culture. Here’s how firms can cultivate that mindset:

• Executive Buy-In: Leadership must prioritize resiliency as part of strategic planning and risk management.
• Cross-Departmental Collaboration: Resiliency planning should involve compliance, IT, operations, legal, and client services.
• Ongoing Training: Employees at all levels should understand their role in supporting resiliency, from identifying phishing attempts to knowing emergency communication protocols.
• Regular Testing and Updates: Resiliency plans should be reviewed and tested regularly to reflect changes in operations, personnel, and technology.

The Future of Operational Resiliency

As technology evolves and client expectations increase, the definition of operational resiliency will continue to expand. Artificial intelligence, automation, and data analytics will play larger roles in anticipating disruptions and responding in real time. At the same time, firms must remain agile and continually assess their vulnerabilities.

The wealth management firms that prioritize operational resiliency today will be best positioned to retain and protect their clients, attract top talent, and scale their business without compromising service or compliance.

Strengthen Your Resiliency Strategy with Oyster’s Expert Guidance

At Oyster Consulting, we understand that operational resiliency is more than regulatory box-checking—it’s a business imperative. Our experienced operations and regulatory compliance consultants work to help firms build and strengthen resiliency frameworks that align with both regulatory expectations and business goals. From conducting business continuity plan reviews and cybersecurity risk assessments to evaluating vendor oversight and updating supervisory procedures, Oyster delivers actionable insights and practical solutions. Whether you’re enhancing your existing resiliency program or starting from the ground up, we provide the strategic guidance and hands-on support you need to protect your clients, meet regulatory standards, and ensure business continuity.