You know the feeling: a new employee starts, and you spend half a day figuring out which five login credentials they need. Or worse, an employee leaves, and three months later you realize they still have access to a niche marketing tool because no one remembered to remove them.
This is the reality for many RIA and wealth management firms. Over time, firms accumulate software like clutter in a garage. An advisor signs up for a scheduling app. The marketing team tests a new customer relationship management (CRM) plugin. Operations adopts a project management tool. Years pass, and these applications — along with their associated monthly fees and passwords — pile up.
This is called digital sprawl.
While it might seem like just a messy desktop or a bloated credit card statement, digital sprawl is a significant operational risk. Every extraneous application is a potential entry point for cyberthreats. Fortunately, cleaning up this digital mess is one of the lowest-cost, highest-impact moves a firm can make to improve security immediately.
What digital sprawl looks like in wealth management
Sprawl rarely happens all at once. It creeps in slowly. It starts when a team member finds a “better” way to sign PDFs and creates an account with a third-party vendor. It grows when you trial a piece of software, decide not to use it, but never actually cancel the account or delete the data you uploaded.
The result is shadow IT, or applications and devices used within your firm without explicit approval or oversight from IT leadership.
Shadow IT creates a significant security risk. After all, you can’t secure assets that aren’t on your radar. If you lack a master list of every application housing company or client data, you have sprawl. And if you have sprawl, you have blind spots in your defenses.
Unchecked software increases your risks
Think of your firm’s network as a house. Every application you use is a door or window. When you have five core applications, you have five locks to check. When you have 50 different logins spread across your staff, you have 50 potential entry points.
Hackers frequently target dormant accounts because they are often unmonitored. Likewise, an old subscription that nobody checks is the perfect backdoor for a breach. And if a bad actor compromises a forgotten account that shares a password with your other critical business software, they can move through your systems undetected.
Beyond the threat of hackers, sprawl complicates compliance. SEC requirements demand strict control over client data, which means you need to know exactly where that data lives. When data is scattered across unauthorized spreadsheets, cloud storage trials, and old email marketing tools, accurate data mapping becomes nearly impossible, putting you at risk of noncompliance.
A low-cost strategy to lower risk
Reducing risks doesn’t require buying expensive new cybersecurity software. It requires organization and subtraction.
Start by surveying your team. Ask your staff which tools they use daily and which ones they haven’t used in months. Cross-reference this list with your corporate credit card statements to catch auto-renewing subscriptions that have fallen off the radar.
Once you have a full inventory, look for redundancies. Many firms pay for Slack, Zoom, and Dropbox even though they already have a Microsoft 365 license that includes Teams and OneDrive. Consolidating these functions into one platform reduces your costs. Doing so also shrinks your attack surface.
Finally, implement single sign-on (SSO) wherever possible. SSO allows your team to use one secure identity to access all approved apps. If an employee leaves the firm, you disable their single identity, and they instantly lose access to everything. This eliminates the panic of wondering if a former employee still has access to client data.
| An SSO solution simplifies access while bolstering your firm’s overall security posture. In this episode of RIA Tech Talk, we compare the top SSO tools specifically designed to meet the needs of modern advisors. Listen to episode #7 now |
Why cleaning up saves more than just data
Cleaning up digital sprawl improves your firm’s daily operations immediately.
- Operational efficiency: Fewer places to look for files means faster work. Your team stops wasting time toggling between 10 different tabs or remembering a dozen different passwords. A streamlined operational environment allows financial advisors to focus on clients rather than tech support.
- Cost reduction: Canceling unused or redundant subscriptions puts cash directly back into your budget. For a small firm, saving a few hundred dollars a month on useless SaaS fees adds up to significant capital that can be reinvested elsewhere.
- Peace of mind: Firm owners carry enough stress. Knowing exactly who has access to your systems allows you to sleep better. You replace the nagging worry of “what are we missing?” with the confidence of total visibility.
How RIA WorkSpace’s managed IT services help
At RIA WorkSpace, we understand that RIA and wealth management firms often lack the time to police every software signup. That’s why through our managed IT services, we handle everything IT for you, including vendor management and security protocols.
Specifically, we act as the liaison between your firm and your software vendors. We track your licenses, handle renewals, and verify that security settings meet industry standards. Instead of juggling relationships with five different support desks, you have one dedicated partner managing your entire IT ecosystem.
We also implement the security controls mentioned above, such as SSO and strict access management, so you don’t have to worry about the technical setup.
Ultimately, digital sprawl is a silent risk that grows over time — but you don’t need an expensive overhaul to fix it. You just need to clean house. Contact RIA WorkSpace today to regain control of your digital environment.