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Many financial advisors turn to the cloud for their data storage needs. But even with encryption, cloud storage comes with risks.

Your clients may not be happy with their sensitive information making its way onto a tech company’s server somewhere in the U.S. And you may be nervous about cloud service providers losing your data, or an internet outage or a cloud-based outage disrupting your access.

Storing your data on your premises can be an alternative or a complementary approach to cloud-based storage. A network-attached storage (NAS) device can help you do this.

A NAS device is a small computer filled with hard disks that connects directly to your network. The device stores all your office’s files in a central place so that your employees can access them easily. Correctly configured, your NAS will pop up as a network drive on your computer, looking like just another data-storage location.


When choosing a NAS drive, consider its capacity. How much storage will you need? Examine the data already stored on your desktops and laptops. Calculate how much new data you generate each month, then choose a device that will support that amount for at least a year or two.

Some NAS devices feature spare drive bays, meaning that you needn’t buy all the storage capacity you need at once. Instead, you can buy a new drive when your existing NAS is almost full. Some devices come with no drives at all; instead, you choose the capacity you need for each bay so you can plan and budget for growth.


Your NAS capacity will depend on another factor: availability. Just like any other hard drive, NAS drives can go wrong. A crashed disk head can ruin your data. One way around this is to buy a RAID-compatible array. RAID stands for “redundant array of inexpensive disks.” Instead of using all your NAS’ disk drives to store your data, a RAID-compatible NAS will allocate half of them for data storage and mirror the same files on the other drives. If one disk fails, your data is still safe on the others.

A RAID protects you from random hard drive crashes, but it isn’t a backup solution because the hard drives are all on one NAS device. A flood or fire still could ruin all your data. You can choose a fire- and flood-proof NAS device from a firm such as ioSafe to protect your physical drive.

Even then, storing your files on a NAS drive won’t protect you from ransomware, which scours your network and damages the files stored there. In that situation, the cloud still is useful. iDrive is one of several services that back up your entire NAS drive to an encrypted cloud storage service. Many NAS drives also feature built-in integration with popular cloud services such as Dropbox and Google Cloud for automated backup. Just remember that synchronizing files to the cloud is not enough; the cloud service you choose should create snapshots of your files at set points in time that you can use to restore your data to protect yourself.


The counterpart to availability is confidentiality. Your NAS box must protect data from prying eyes and from thieves who might break into your office and steal the entire device. Encrypting data stored on your NAS is an excellent way to protect them, but you must do it properly. Ensure that your NAS device doesn’t store the secret key used to encrypt the data on the drive itself. Choose a device from a vendor such as QNAP, which lets you configure your NAS box to require a password when it powers on. Then, you must choose a strong password and store it securely.

Managing who has access to what data on your NAS box and from where also is important. Begin by changing the default login for the administrative account (which gives you God-like access to everything on the NAS box). Then, set up separate accounts, each with access to a different folder and protected by an individual password. One group of employees may need access to client files, for example, while another may need to access only marketing materials or correspondence templates.

Many NAS boxes let users access the device remotely over the internet. If you don’t need this feature, turn it off. If you do, be sure to configure the NAS’ firewall or configure the firewall on your office’s internet router to restrict access.

Finally, be sure to update your NAS firmware frequently. This is the computer software that makes the NAS run, and vendors patch against vulnerabilities in this firmware all the time. While you’re at it, regularly update the firmware for your internet router and any other connected devices in your office.

Once you’ve configured all these options, put your data – which are probably spread across a forest of various laptops, desktops and tablet devices – onto your NAS box.

There are two ways to do this:

You can copy files automatically between your computers and the NAS box. This involves setting up file-sharing with the NAS box individually on each computer in the office. For this, the NAS box will need to support either SMB (a common protocol for sharing files on local networks) or the slower, more cumbersome FTP protocol (useful for accessing storage remotely). Your NAS device also will need to include its own backup software that lets you copy files from computers on your network.

A simpler approach involves moving data from each computer manually to your NAS device. Map the NAS device as a network drive according to the instructions in the manual, then drag and drop the files you want to move into your folder on the NAS drive.

You can use the NAS device as the sole storage point for data you want to share and keep using your own computer for your private files. Or you can store all the data you don’t need to share with others in an individual folder on the NAS drive and protect the folder with a password.

A single, unobtrusive box can help you tame your data while providing access to everyone who needs it. Just ensure that you secure and back up your NAS drive so that there is no single point of failure.