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You’re a financial advisor still working to make up for the disruptions caused by the pandemic. Prospecting and marketing your practice are even bigger challenges, but you’ve virtualized your practice and are adapting to the new challenges brought on by this global crisis.
What about the next crisis? What about a combination of crises?
Many Southern Californian financial advisors were asking exactly this a couple of weeks into the lock-down when a 4.9 magnitude quake struck in early April. They continue to ask these questions (and hopefully are addressing them) as the region continues to experience an earthquake swarm near the southern end of the San Andreas Fault.
The U.S. Geological Survey has predicted when the “big one” does hit, the business disruption losses caused by the quake, resulting fires and disrupted services could total $200 billion after the first six months. Even businesses not located in California could be cut off from 40% of the nation’s imports and pipelines.
If you don’t know what you would do if you were suddenly affected by a natural or man-made disaster on a local, national or global scale, you don’t have a business continuity plan.
Here are five considerations to start building one. Today.
- Put someone in charge
Depending on the size of your practice, you’re going to either want to assign the task to a crisis planning leader or committee. The individual(s) tasked with this should be actively planning and testing to respond to all kinds of near-term and long-term impacts and ensuring everyone has the plan and is aware of their responsibilities should a disaster occur. Enlist the help of a business consulting provider to ensure the consideration of all possible scenarios for your specific business.
- Anticipate the impact
Your practice needs to identify and prioritize all the mission-critical business processes you need to remain up and running with as little disruption to client servicing and account management as possible.
- Anticipate your ability to respond
It’s not enough to know where and how your practice would be hardest hit. You need to know what to expect in terms of recovery time for every scenario you might encounter. What resources will be required to perform mission critical functions? What happens if some employees are unable to perform their business continuity duties due to the disaster? Have you implemented training for critical processes so that others can step in to assist?
- Have a plan in place for the short and long term
If access to your office has been disrupted, short-term business continuity plans call for remote office functionality for mission critical groups. This should include recovery and access to your systems, data, client portfolios and ability to trade as well as backup methods for maintaining communication with clients and personnel. Long-term incident scenarios call for mission critical groups to relocate to alternate work locations. How will you quickly replace what was lost? How quickly can your employees be able to operate out of their home or even at another location should they no longer have access to their home?
- Protect your data
Not only should you be backing up your server data in real-time through mirror servers located at alternate disaster recovery locations, you should make sure your hardware, software and client data are safeguarded to prevent unauthorized access. (Phishing, malware and other attacks always rise following major disasters.) Consider implementing multifactor authentication and encryption for all remote network access, including laptops.
While no plan is perfect, you can make it the strongest it can be by regularly revisiting it to ensure the anticipation of any scenario and conducting a live test run with the entire practice. You can also check with your business consultant, who can discuss scenarios specific to your business and how you can best prepare to handle them.
30+ year veteran executive Joe Farasat is VP, head of business consulting at AssetMark. Joe helps advisors identify opportunities to increase value, drive growth and boost performance. He earned his bachelor’s in business administration from Chadwick University and holds series 7, 8 and 63 licenses. Email Joe at [email protected].
Read more articles by Joe Farasat
Advisor Perspectives welcomes guest contributions. The views presented here do not necessarily represent those of Advisor Perspectives.
