Less than three months ago, a mystery illness surfaced in Wuhan, China, and was quickly named COVID-19, a type of coronavirus. We know what has transpired from that point until today, with an unprecedented lockdown of populations and economies around the world.
In response, FINRA issued Regulatory Notice 20-08 to address business continuity planning for firms, as COVID-19 eventually reached the US mainland. In the notice, FINRA referred to pandemic preparedness guidelines it had provided in Regulatory Notice 09-59, a response to the H1N1 “swine flu” pandemic of 2009.
The regulatory group explained “a member firm may consider employing methods such as social distancing, travel restrictions, revised sick leave policies, special pandemic leave time, or specialized seating plans for densely populated floors or buildings.”
“These methods may also involve remote offices or telework arrangements (e.g., working from home or a backup or recovery location) for a broad range of employees,” it added, echoing the recommendations of the World Health Organization and Centers for Disease Control.
The coronavirus outbreak of 2020 will likely serve as the defining milestone for continuity planning in the wealth management space.
Any firms which have failed to sufficiently address real-time redundancy, mobile communication capabilities, and work-from-anywhere readiness may be left behind for good.
These efficiencies have become business necessities in the 21st century. They are good for business and the bottom line when implemented well.
As with 9/11, the human capital element of the coronavirus pandemic is the most difficult to discuss, yet also the most critical. We are planners and advisors, after all. We are paid to have these difficult discussions with our clients.
What happens if your Chief Compliance Officer has to leave for a week to care for a sick relative? What happens if your personal assistant or junior advisor is quarantined for 14 days? What happens if you need to be hospitalized due to complications from COVID-19 for an extended period of time?
Steps to Take
Ask yourself: What advice would I give a client who is a business owner?
Then, follow these steps during the current pandemic:
1. Have a written, easy-to-follow business continuity plan in place.
2. Make sure you communicate your continuity and succession plans to your leadership team and key personnel. Regularly.
3. Ensure your team members are mobile, connected, and feel comfortable working from anywhere.
4. Outsource anything you must to make your readiness plan relevant and current.
5. Follow up with your vendors regularly to ensure you understand their readiness plans.
6. Have an up-to-date, well-thought-out succession plan in place. Both temporary and permanent. Your clients, your employees, and your family deserve as much.
William Cerynik is director of Business Development, Senior Wealth Advisor, with Ashton Thomas Private Wealth.