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Practice Management > Building Your Business

3 Steps to Disaster-Proofing Your Firm

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From hurricanes to wildfires and more, 2017 brought calamitous weather and major events that forever changed many communities and industries across the country. Many financial advisors found their offices inaccessible for reasons beyond their control — but their duties to clients hadn’t changed. This reality in times of crisis is forcing advisors to take a hard look at their businesses and seriously consider whether they are adequately prepared to serve their clients at all times.

We spoke with a variety of advisors in areas affected by the extreme weather and disasters that occurred in 2017, and their experiences confirmed that the value of preparation and communication cannot be overstated. Clarifying communication processes, protecting against potential breakdowns in emergency procedures, and regularly testing your firm’s preparedness can make all the difference in ensuring you are still able to assist clients even in adverse circumstances.

1. Formalize a Broad Disaster Plan

It’s vital that everyone in your office understands what to do when business as usual is jeopardized by an unforeseen event. To be prepared, you should develop a simple plan that ensures you can support your clients in the event of a disaster. It should be a plan that your staff can access after hours or refer to at home. At the very least, your plan should provide answers to the following questions:

  • How will staff reach one another to disseminate instructions in the event of an emergency?
  • Will the key vendors you rely on have alternative ways to reach you aside from your main office phone line?
  • Does everyone have contact information for emergency services such as police, fire, and building management?
  • Where can staff plan to meet in order to continue operations and serve clients, such as an affiliated office in another city?

By clarifying the answers to these questions in advance, you bring your business a major step closer to full disaster preparedness.

2. Consider All Links in the Chain

Creating a clear, buttoned-up plan is a necessary foundation, but also thinking ahead to possible points of failure in that plan will further strengthen your ability to withstand an emergency. We’ve seen vulnerabilities crop up when even a single staff member is unavailable. During a major weather event, for example, if only one person in your firm knows how to log in remotely or only one person knows how to operate your Customer Relationship Management system (CRM), you are vulnerable. Identifying and eliminating points of failure through cross-training or documenting procedures is important. Also, firms with a well-established chain of command may find their entire network of communication weakened if just one high-level member is inaccessible. To prepare for eventualities like these, we encourage advisors to create multiple options for passing on instructions if the primary one fails.

Similar problems arise when clients are inaccessible. Suppose you need to distribute emergency funds to a client, but they are unreachable and cannot give final authorization. You can avoid this kind of roadblock during a crisis by drawing up an agreement with your client that authorizes you to distribute emergency funds in the face of a disastrous event. And as an additional backup, always ensure that you have multiple ways to contact your client on file should you need to get in touch with them urgently for any other reason.

Even with potential vulnerabilities with staff and clients accounted for, disaster plans fall short if they don’t consider a business’ most basic resource: power. Make sure you always have alternate power sources and batteries to keep office equipment running in both your main location and any affiliated offices.

3. Practice, Practice, Practice

The final line of defense involves ensuring that your disaster preparedness procedures are fresh in the minds of everyone at your firm. At least once a year, set aside time with your team to run through a surprise scenario and note how your plan succeeded — or didn’t. You can achieve much more than you ever expected simply by gathering your key staff around a conference table and talking through an unexpected scenario. Were you able to get in contact with all necessary parties? Which parts of the plan did staff members forget or fail to execute? Use those findings to make updates to your plan, and continue testing it to ensure success even during a situation lasting several days. Many advisors reported marked improvement in their firms’ overall readiness after as little as one hour spent practicing responses to hypothetical crises.

We could not have foreseen the intensity and frequency of disasters that struck the country last year, but we can certainly learn from them. Taking the time to create contingency plans for your business now will give your staff the confidence and the tools to deliver crucial client support right when your clients may need it the most.  


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