Does Your Practice Have a Plan for the Unexpected?

Whether we like it or not, change is a constant. Status quo doesn’t exist; even if change is slow, it’s still constantly churning in the background.

Often, that change happens outside of ourselves and we have to respond to it. A custodian, technology partner, or other outside resource we rely on might be acquired or change in another material way. When that happens — and it will — how will you respond?

The biggest risk to a firm’s longevity is being unprepared for change. It’s similar to buying insurance: If you get in a car accident, you’ll wish you had insurance if you don’t — but that decision must be made before the accident happens for it to make a difference.

Financial advisors have to be proactive about change instead of reactive, and they only can reach that point if they have an Advisor Preparedness Plan (APP).

An APP is more than a business continuity plan, which dictates what happens to a business if an owner leaves or passes away.

In contrast, an APP includes a strategy and awareness of what may change, what a firm can do when change occurs in various ways, and a plan for how to continue serving clients.

Building an Advisor Preparedness Plan

To begin understanding what guidelines you should have in place, start with templates the SEC and FINRA provide for business continuity plans.

Once you’ve done that, create a plan in four steps:

Step 1: Accept that you can’t stop change. 

This happens before you ever write a word. From that point, you have a choice not unlike the one Neo made in the first Matrix movie.

Will you take the red pill and wake up, embrace change, and try to build a better way forward for your firm? Or take the blue pill and choose to hang onto the status quo?

Step 2: Be true to yourself.

When you look in the mirror, the person you have to answer to is yourself.