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VALIC Financial Advisors, Inc. – Business Continuity Statement

Overview:

The scope of VALIC Financial Advisors, Inc. (VFA) business continuity planning today entails certain key VFA business operations and data center locations.  Business continuity planning is the process which defines the procedures employed to ensure the timely and orderly resumption of a company’s business, through its ability to execute plans with minimal interruption to time-sensitive business operations.

How well VFA is prepared to survive a business disruption with minimal interruption to its daily routine will depend on the elements identified and the provisions made for review, maintenance, quality assurance and accuracy of its business continuity plans. Specific plans have been developed and teams have been identified for each time-sensitive business operation.  Each plan prioritizes the critical business functions and states a strategy for recovery within a specified timeframe.

The VALIC Business Continuity Planning department is responsible for the guidelines, methodologies, and framework to support the strategies for recovery. The Business Continuity Planning infrastructure is responsible for developing and maintaining the plans.

VFA BCP Objectives:

The objectives of the VFA Business Recovery Continuity Plan are to:

  • Avoid or minimize deaths and injuries.
  • Control and terminate incidents as quickly as possible.
  • Prevent a minor incident from becoming a major disaster.
  • Minimize commercial and reputation damage.
  • Protect account assets and financial position.
  • Minimize the risk of legal liabilities.
  • Resume and recover any disrupted business function or operation rapidly and effectively.
  • Ensure compliance with all applicable laws and regulations.
  • Maintain confidence and good relations with public safety and regulatory agencies, customers, service providers, and other official parties.
  • Satisfy the interests and concerns of VFA programs and other related business entities.

VFA Business Continuity Guidelines:

The VFA Business Continuity Plans were developed in accordance with the AIG Corporate Business Continuity Management Business Policy. The AIG Business Continuity Management Business Policy uses BS25999 industry standard.  The key elements of the policy include, Risk Assessment, Business Impact Analysis, Business Continuity Plan, and Plan Testing. These key elements are discussed below:

  • Risk Assessment – There are numerous risks to any business.  From natural to man-made, these risks can be or may become threats to our business.  Threats with the greatest probability of occurrence for VFA include storms or hurricanes, high water or flooding, fire, bomb threats, terrorist attacks, breach of security and general service interruption.  Facilities/Property Management performed a risk assessment for each building.  Each business unit followed this up by assessing any additional risks that would pertain to their specific operation.
  • Business Impact Analysis – Each VFA business unit is required to identify the time criticality of each business function, as well as the resources that the function needs to successfully recover.  Additionally, each unit must review annually the time criticality of all business functions.
  • Business Contingency Plan – VFA business units document and update annually a contingency plan to support the business unit’s needs.  Contingency plans include event management procedures, employee communication strategies, alternate site requirements, procedures for notifying clients, recovery management, and alternate site preparation checklists.
  • Plan Testing – Once the recovery plan documentation is complete, it is tested regularly to ensure that recovery capability remains viable.  At least one full-scale recovery simulation, or a series of logically organized, segmented exercises representing a full exercise, is conducted annually.  In addition to full-scale recovery simulation tests, an annual tabletop/walkthrough exercise of the plan is conducted to gauge each participant’s understanding of individual roles and responsibilities.

VFA Recovery Strategies  

Threats that materialize can cause varying degrees of outages that can be classified as short-term, intermediate-term, or long-term. Day-to-day emergencies are addressed at VFA through emergency response/escalation procedures that are used when needed.  VFA Business Continuity Plans have been developed to address a variety of disaster categories. The categories are defined as follows:

  • Short-Term: Workplace Damaged or Inaccessible
  • Intermediate Term: Building Damaged or Campus Inaccessible
  • Long-Term: Worse Case Scenario (Local or City-wide Evacuation)

VFA Disaster Recovery:

VALIC has implemented a “self-recovery” strategy for disaster recovery of open systems applications.  Critical applications running in our Amarillo, Texas, data center are recovered in the event of a disaster at a facility in Fort Worth, Texas.  Critical data is replicated from the Amarillo data center to the Fort Worth facility on a daily basis.  In the event of a disaster at the Amarillo data center, technical recovery teams restore the infrastructure, databases and applications to the most current recovery point as dictated by business requirements.  Upon completion of the recovery process, the VALIC network would be rerouted to the Fort Worth facility and the business would resume business critical operations.

VALIC currently contracts with a 3rd party vendor for workgroup recovery in the event the home offices are unusable.  Business users will be relocated to the nearest workgroup recovery site or another appropriate location.  Operations will continue at the workgroup recovery site until the damaged facility is repaired or a suitable alternate facility is acquired.  The 3rd party vendor location containing adequate space for our business users is in Grand Prairie, Texas.

VALIC also contracts for mainframe operations.  In the event of a disaster, our 3rd party vendor (Affiliated Computer Services) will restore the mainframe at a SunGard remote facility.  Once the mainframe is restored, business units will be able to access mainframe applications through a designated disaster recovery circuit.  All business units currently accessing the mainframe through our local network will be able to access the mainframe during a disaster situation.

VFA and its clearing firm, National Financial Services, LLC (NFS), have an agreement in which NFS may provide trade execution, clearing, and other related services for your brokerage account. NFS backs up VFA’s important records in a geographically separate area. While every emergency situation poses unique problems based on external factors, such as time of day and the severity of the disruption, VFA has been advised by NFS that its objective is to restore its own operations and be able to complete existing transactions and accept new transactions and payments in a timely manner. Your orders and requests for funds and securities could be delayed during this period.

VFA is also the Broker/Dealer of record on many accounts held directly at third party mutual fund and annuity companies.  These third-party companies each have their own business continuity plan in place in case normal business operations are interrupted for any reason.

In the event VFA ceases operations, customers who have retail accounts with NFS may call the VFA customer service line at 866-544-4968.  VFA customers who have accounts held directly with third party mutual fund or annuity companies should call those companies directly if they need to place a trade, request a distribution, or have questions about their account.  Clients who have VALIC Annuity Accounts should contact the VALIC Client Care line at 800-448-2542.

 

VALIC Financial Advisors, Inc., member of FINRA, SIPC and an SEC-registered investment advisor.