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Practice Management > Building Your Business

Does Your Practice Have a Plan for the Unexpected?

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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.

You have to ask, in a professional sense, “Am I doing everything I can to the best of my ability?”

Step 3: Identify the core components responsible for business success.

Look at the environment of each, and identify a backup plan for what you’ll do if something changes to them.

If a key person leaves or retires, even someone outside of your top management team, what process will you follow to replace them and keep client service consistent? Ask the same question about the technology you rely on each day.

Step 4: Communicate.

A disaster recovery plan doesn’t do anyone any good if it’s written down and no one knows what it says.

Talk to your team about your planning process so there is awareness throughout your organization. As appropriate, communicate the relevant parts of your preparedness plan to clients as well.

Good Intentions Don’t Count

Many firm owners have every intention of making a plan for how to embrace and adapt to change, but few get to the point of actually creating a comprehensive plan.

Relate this to how you talk with clients about their financial plans. If you look at what you’ve currently put together, what would your Monte Carlo Meter of success say? Would you be in the 95% probability, or much lower?

You have to plan your work and work your plan. Your team needs to know where to go, and what to do, when change occurs. That knowledge requires proactive planning, and also practice in the form of clear communication.

Whether it’s fast or slow, change always arrives. Do your team and your clients right by having a plan for dealing with change, however it comes.


Jarrod Upton, MBA, MS, CFP is Chief Operations and Senior Consultant at Herbers & Company, an independent management and growth consultancy for financial advisory firms. He can be reached at  


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