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October 24, 2016 at 03:30 AM
Financial professionals live in perilous times, especially those who advise clients about investments or who actually manage client money.
Related: Your AUM increase using social media: a cool $8 million-plus
Risks of cyber-attack, ransomware, identity theft, natural disasters, and even personal health crises are substantial.
Although most advisors know this, a recent SEI Advisor Network and FP Transitions white paper found that only 45 percent of financial professionals have a written business-continuity plan in place to assure their business stays open during a crisis.
Operating without a succession plan is even more dangerous when you consider the E&O insurance risks involved.
When a client with a pressing problem can’t reach his or her advisor, or an advisor can’t execute an important request, the person will rightfully assume the advisor dropped the ball. Complaints and lawsuits may soon follow.
For this reason, the National Ethics Association urges all financial professionals, not just investment advisors, to revisit their existing business-continuity plans — or create one if necessary. Since regulators have begun requiring this of licensees, now’s the perfect time to check this task off your to-do list.
