Vanguard Point Reduces Email Archiving Costs by 30% with Cloud

Vanguard Point Reduces Email Archiving Costs by 30% with Cloud

Executive Summary

Vanguard Point Advisors, a growing RIA managing over $200 million in client assets, faced escalating costs and compliance challenges with their on-premise email archiving system. They needed a scalable and cost-effective solution to meet SEC Rule 17a-4 requirements. By migrating to a secure cloud-based platform powered by Proofpoint Enterprise Archive and integrated with their existing Microsoft 365 environment, Vanguard Point reduced their email archiving costs by 30%, saving them $8,000 annually and freeing up valuable IT resources.

The Challenge

Vanguard Point Advisors experienced significant pain points with their legacy on-premise email archiving system. Initially implemented five years prior, the system was nearing capacity and proving increasingly difficult and expensive to maintain. The challenges included:

• High Storage Costs: The cost of maintaining the physical servers and associated infrastructure was becoming prohibitive. The initial hardware investment was $15,000, and annual maintenance contracts averaged $5,000. As the firm's AUM grew by an average of 15% annually, so did their email volume, further exacerbating storage limitations. They projected needing to upgrade the storage capacity within the next 12 months, an additional expense estimated at $10,000.

• Resource-Intensive Management: The system required dedicated IT resources to manage backups, updates, and troubleshooting. This consumed approximately 10 hours per week of their IT manager's time, costing the firm an estimated $5,000 per year in labor costs alone (based on an hourly rate of $50). This time could be better allocated to strategic IT initiatives directly supporting client service and growth.

• Scalability Limitations: The on-premise system was difficult to scale to accommodate the firm's rapid growth. Adding additional storage required significant upfront investment and downtime, hindering their ability to respond quickly to increasing data volumes. They anticipated needing to double their storage capacity within the next three years, a substantial capital expenditure.

• Compliance Concerns: Ensuring compliance with SEC Rule 17a-4, which mandates the preservation and accessibility of electronic communications, was a constant concern. The existing system lacked advanced e-discovery capabilities, making it difficult to efficiently search and retrieve specific emails for regulatory audits or legal proceedings. A missed compliance deadline could result in significant fines and reputational damage, potentially costing the firm upwards of $25,000.

• Inefficient E-Discovery: Performing e-discovery was time-consuming and cumbersome, requiring manual searches and exports. This could take days to complete, significantly delaying response times to regulatory inquiries. Each e-discovery request was estimated to take 8 hours of staff time.

The Approach

Golden Door Asset worked closely with Vanguard Point Advisors to develop a comprehensive cloud migration strategy focused on reducing costs, improving compliance, and enhancing scalability. Our approach involved the following key steps:

1. Needs Assessment: We conducted a thorough assessment of Vanguard Point's current email archiving infrastructure, data volume, compliance requirements, and budgetary constraints. This included analyzing their existing storage capacity, IT resource allocation, and e-discovery processes. This assessment helped us determine the optimal cloud-based solution and migration strategy. We also interviewed key stakeholders to understand their specific needs and concerns.

2. Solution Selection: Based on the needs assessment, we recommended Proofpoint Enterprise Archive, a leading cloud-based email archiving platform known for its robust security, advanced e-discovery capabilities, and seamless integration with Microsoft 365. Proofpoint offered the necessary features to meet SEC Rule 17a-4 compliance requirements, including immutable storage, legal hold capabilities, and audit trails. Competitors like Mimecast and Barracuda were also evaluated, but Proofpoint was ultimately selected for its superior integration capabilities and competitive pricing.

3. Data Migration Planning: We developed a detailed data migration plan to minimize disruption to Vanguard Point's operations. This plan included a phased migration approach, starting with a pilot group of users to validate the migration process and identify any potential issues. We utilized Proofpoint's migration tools to efficiently transfer the historical email data from the on-premise system to the cloud.

4. Configuration & Customization: We configured Proofpoint Enterprise Archive to meet Vanguard Point's specific compliance and retention requirements. This included setting up automated retention policies, defining user access controls, and configuring e-discovery workflows. We also customized the platform to align with their existing Microsoft 365 environment, ensuring a seamless user experience. We implemented a 7-year retention policy, as mandated by SEC Rule 17a-4 for broker-dealers.

5. Training & Support: We provided comprehensive training to Vanguard Point's IT staff on how to manage and utilize the new cloud-based email archiving system. This included training on e-discovery procedures, retention policy management, and user access controls. We also provided ongoing support to address any questions or issues that arose.

Technical Implementation

The technical implementation involved a phased migration of Vanguard Point's email data from their on-premise archiving system to Proofpoint Enterprise Archive. The key steps included:

• Integration with Microsoft 365: Proofpoint Enterprise Archive was seamlessly integrated with Vanguard Point's existing Microsoft 365 environment using secure API connections. This enabled automatic archiving of all incoming and outgoing emails, ensuring complete and accurate data capture. The integration also allowed users to easily access archived emails directly from their Outlook clients.

• Data Migration: A secure data transfer process was used to migrate the historical email data from the on-premise system to Proofpoint's cloud storage. The data was encrypted both in transit and at rest to ensure data security and confidentiality. The migration process was carefully monitored to ensure data integrity and completeness. This involved transferring approximately 500 GB of email data.

• Retention Policy Configuration: Automated retention policies were configured within Proofpoint to comply with SEC Rule 17a-4. These policies automatically delete emails after a pre-defined retention period, ensuring compliance with regulatory requirements and minimizing storage costs. We implemented a seven-year retention policy for all email correspondence.

• E-Discovery Setup: Advanced e-discovery capabilities were configured to enable efficient searching and retrieval of specific emails for regulatory audits or legal proceedings. This included setting up keyword searches, date range filters, and user-based searches. The system also provided tools for exporting search results in various formats, such as PDF or PST.

• Security Measures: Robust security measures were implemented to protect the confidentiality and integrity of the archived email data. This included multi-factor authentication, encryption, and regular security audits. Proofpoint's data centers are SOC 2 Type II certified, ensuring compliance with industry-standard security practices.

• Cost Calculation: The previous on-premise solution had an annual cost of $10,000 ($5,000 maintenance + $5,000 labor). The new cloud solution had an annual cost of $7,000. The difference is $3,000 per year or a 30% savings. The avoided $10,000 hardware upgrade was a one-time savings.

Results & ROI

The cloud migration delivered significant results and a substantial return on investment for Vanguard Point Advisors:

• Reduced Storage Costs: Cloud-based email archiving reduced email storage costs by 30%, saving the firm $3,000 annually. The elimination of hardware maintenance and upgrade costs contributed to this significant cost reduction. The planned $10,000 hardware upgrade was completely avoided.

• Improved IT Efficiency: Migrating to the cloud freed up valuable IT staff time, allowing them to focus on strategic IT initiatives that directly support client service and growth. The reduction in IT management overhead saved the firm an estimated $2,000 per year. The IT manager now spends only 2 hours per week on archiving-related tasks, a decrease of 80%.

• Enhanced Compliance: The cloud-based platform provided enhanced compliance with SEC Rule 17a-4, with robust e-discovery capabilities and automated retention policies. This reduced the risk of non-compliance penalties and improved the firm's overall regulatory posture.

• Improved E-Discovery Time: Performing e-discovery requests went from taking 8 hours to 1 hour. This represents an 88% time savings.

• Increased Scalability: The cloud-based system provided the scalability needed to accommodate the firm's rapid growth, ensuring that they could easily manage increasing email volumes without incurring significant infrastructure costs.

• Improved Data Security: The robust security measures implemented by Proofpoint ensured the confidentiality and integrity of the archived email data, providing peace of mind for Vanguard Point's clients and employees.

• Total Annual Savings: The combined savings from reduced storage costs and improved IT efficiency totaled $8,000 annually.

Key Takeaways

Here are three key takeaways for other RIAs considering a cloud-based email archiving solution:

1. Assess Your Current Infrastructure: Conduct a thorough assessment of your current email archiving infrastructure to identify areas for cost reduction, efficiency improvements, and compliance enhancements.
2. Prioritize Scalability and Security: Choose a cloud-based solution that offers the scalability and security needed to accommodate your firm's growth and protect sensitive client data.
3. Automate Compliance Processes: Implement automated retention policies and e-discovery workflows to streamline compliance processes and reduce the risk of non-compliance penalties.
4. Consider Integration Capabilities: Ensure the archiving solution integrates seamlessly with your existing technology stack, particularly your email platform and CRM system, to maximize efficiency and user experience.
5. Quantify Your ROI: Before committing to a cloud migration, develop a detailed ROI analysis that quantifies the potential cost savings, efficiency gains, and compliance benefits.

About Golden Door Asset

Golden Door Asset builds AI-powered intelligence tools for RIAs. Our platform helps advisors automate compliance tasks, enhance client engagement, and generate actionable insights from their data. Visit our tools to see how we can help your practice.