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Continuity and Succession Planning: Because bad things happen to good advisories

Posted by Robin Green, Ann Schleck & Co. Head of Research on July 15, 2016

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How would your practice and clients fare if your business was disrupted by a hurricane, a cyber-attack, or an act of war or terror?  What if your main server and backup server failed? What if a big chunk of your leadership team died in a plane crash?

As Ann Schleck & Co. helps advisors assess business wins and losses, we repeatedly hear about risks from the less dramatic, but also far more common events, such as the retirement of senior advisors, data security breaches, and businesses being acquired.

Therefore, it’s a great practice to have a documented continuity and succession plan in place. Yet, many advisors don’t. In fact, our data indicates that only 34% of DC specialist advisors had succession plans in 2015. This number is up from the 26% of DC specialist who had succession plans in place in 2009, leaving 66% of practices exposed.

These figures may change quickly because the SEC has proposed a new rule that requires advisors to have a written plan, policies and procedures to address:

  • maintenance of systems and protection of data
  • prearranged alternative physical locations
  • communication plans
  • review of third-party service providers
  • transition plan in the event the adviser is unable to continue providing advisory services

Under the SEC proposal, advisors would be permitted to tailor the details of their continuity and transition plans based upon the complexity of their operations and the risks related to their business models and activities. The proposal is published on the SEC website and in the Federal Register.

Help us help you

Please take a moment to complete our 2016 Practice Management Benchmarking Study. This brief survey includes questions about the contents of business continuity plans, along with the usual fee and service benchmarking questions. This survey will allow us to better understand market trends and to use them to help you strengthen and differentiate your business.    


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