The solo practitioner needs to consider and reevaluate their firms’ business continuity plan. FINRA rules control how these plans should be created and ultimately distributed to your customers. The purpose of the FINRA requirement, found in Rule 3510(e), is to assist customers in making educated decisions about whether to place their funds and securities at a specific firm. Firms are required to disclose to their customers how your BCP addresses the possibility of a future significant business disruption and how you plan to respond to such events.
So what is the best way to start or create a plan? First, your plan should be designed to meet your specific needs. You need to think about things such as structure, business location, product offerings and business focus. Your plan should be tailored to the business and needs of your firm. Take a hard look at where your business is located, how many support staff you have in the location, how is your clients’ information delivered to you? How would you handle your customers’ needs in the event of a serious business disruption? You should try to provide specific scenarios of varying severity (e.g., a firm-only business disruption, a disruption to a single building, a disruption to a business district, a city-wide disruption, and a regional disruption). Next you would want to discuss your intentions to continue business during the stated scenario and, if so, how long it could take for you to recover. Obviously you want to discuss how you intend to respond to any disruption.
Say you conduct most of your business with outside insurance companies or mutual funds. You’re your firm have to meet the requirements of BCP? Yes. Your plan should consider what the firm’s primary responsibilities are, but also include information on the entities that customers would need to contact to access their assets and funds should your office be out of order. You should also provide your customers with any information they might need in connection with assets held away from your company.
It is a good idea to state in your plan that your BCP is subject to ongoing modification and to provide your customers a way to find those modifications. Next you should designate at least one supervisor to be responsible to review and approve (update) your plan at least on an annual basis. This review should be in writing, dated and signed off on by the supervisor and saved in an easily accessible area for five years.
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When must the plan be delivered to your customer? The disclosure must be sent to customers at account opening, annually, it should be posted on your Web site (if you have one), and it must be mailed to all customers upon request. It is also a good idea to mail it out to your customers upon making any changes.