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A continuity plan lays out how your practice will run if you suddenly die or become incapacitated. Here’s why you need one.
1. Your staff
If something happens to you, your staff will be on the front lines explaining the situation to clients, prospects, vendors and business partners. At the same time, they will be dealing with their own emotions – sadness, grief, fear, anxiety, possibly anger. You owe it to your staff to not only prepare a plan for what happens if you suddenly cannot run the business but to review the plan with them several times a year looking for anything that needs updating. They are the key to retaining your clients until you return or the business is sold.
2. Your family
Unless your family is involved in your practice, they probably have little understanding of how it works. They will be ill equipped to make immediate, important decisions to your practice’s survival in your absence. Like your staff, they will be dealing with powerful emotions, and as you’ve so often told your clients in assisting with their estate plans, that’s not the time to be making critical decisions. If the practice must be sold, the clock is ticking – clients need your services and if they believe you will not return, they will take their business elsewhere. That means the income your practice currently produces to support your family, and the value your family will receive if the business is sold, are dwindling.
3. Your clients
The circumstances under which a continuity plan will be implemented are always difficult, so having well-informed and supportive clients is essential. Having a plan reassures your clients they will be cared for even if you are unable to do so yourself. If you have clients who own businesses, this is also a chance to show them what planning for the future of their business looks like.
4. Your business partners
If you partner with other advisors or work within a branch or financial institution, how will revenue generated from your clients be split while you recover? Will those who do the work in your absence get all the compensation? If you die, will your family get any of that revenue? If so, for how long? Don’t assume all compensation will continue to flow to you or your heirs. That assumption has been the demise of many successful advisor partnerships and left many widows and children with nothing from the business you built.
5. Your prospects
Having a continuity plan can be a great selling point when meeting with prospective clients. It shows you practice what you preach and that their needs will be met even in your absence. If your prospect owns a business, it also gives you the experience to assist the prospect in creating his or her own business continuity plan.
Download our Continuity Readiness Assessment to see how ready you are for the unexpected.
