When it comes to continuity planning, the good news is that more advisors have begun to develop written plans to protect their practices and clients in the event the advisor is unable to manage the business due to a crisis. The not-so-good news is that many of these plans still lack the depth of detail needed to fully protect their firms, employees and clients when the business is unable to operate as usual for any reason.
Most plans answer the high-level questions (Who will run my practice? How will we finance the transition? What will happen to my family?) without spelling out the specific, ground-level actions necessary to ensure the plan is carried out efficiently and effectively.
To put it in football terms, many continuity plans identify who the new coach will be, who will play quarterback and how they will get paid, but they stop short of spelling out the specific plays the team will need to run (much less the answers to granular questions like “How do we get the pads and helmets to away games,” and ”How much athletic tape do we need on hand for each game?”).
These play-by-play questions are just as important as the macro-level challenges in keeping a firm on solid footing through a continuity event. A detailed continuity plan should answer questions like “Where does the office manager send the rent check,” “When is the insurance payment due,” and “If the office is flooded, where can we find key documents?” Documenting the answers to these questions beforehand will help to put the firm in a solid position to continue moving forward.
An effective continuity plan should eliminate confusion, ensure excellent ongoing client service, maintain the security of sensitive information and ensure that the firm continues to generate value for key stakeholders. It should give clients confidence that when the unexpected happens, the firm—and clients’ portfolios—will emerge sound. Inspiring that level of confidence is key.
Here are some tips advisors should bear in mind to ensure that their continuity plans incorporate the level of granular detail needed to successfully guide their firm through a worst-case scenario:
• Identify and write down all the operational tasks you perform to keep the business running (often out of habit). Think through every task necessary to keep the business in operation. Don’t forget the ones that occur only occasionally, or every few months. Develop complete, written instructions that are detailed enough to enable someone unfamiliar with each task to successfully complete them. Next, assign specific roles to staff members in addition to simply naming a continuity partner. Who will be responsible for mission-critical operations like collecting revenue? What are the specific client service responsibilities of each team member? Also include specific roles for navigating a potential crisis. Who communicates the plan to staff and clients? Who is authorized to speak to community members or the media? In a worst-case situation, team members may have to take on responsibilities beyond their regular duties. They’ll need detailed instructions on what tasks they need to assume and how to carry them out.
• No detail is too mundane to spell out explicitly. This includes listing emergency contacts for each component of the business; drafting step-by-step instructions for accessing office and computer systems; mapping out where revenue comes from and where it’s deposited; designating who has access to operating funds; and identifying what bills need to be paid and when. It pays to be exhaustive. Small details are often overlooked in a crisis.
• Make physical copies of the plan and make sure key employees know where to find them. Keep up-to-date, physical copies of continuity plans and supporting information. Make them easily accessible to key personnel and ensure duplicates are kept both on- and offsite to provide redundancy in case of an unforeseen emergency.
• Keep clients in the loop. Proactively let your clients know your firm has documented procedures and responsibilities in case of an emergency. This will reassure them that the firm is prepared to handle the unexpected—and advisors may find that clients were already wondering about their plans in such a situation. It pays to have a written plan ready to show them on demand.