There’s nothing quite like a pandemic to bring business continuity planning to the forefront of planners’ minds. In the most recent call in FPA’s Planner-to-Planner conversation series powered by TD Ameritrade Institutional and Vanguard, host Elizabeth Jetton, M.Ed., CFP®, guided a conversation about what planners have learned about continuity planning from previous crises, and what they’re doing to prepare for unforeseen events so that their clients and their businesses are cared for in the best way possible.
Position Your Firm to Thrive, Not Just Survive
Richard Busillo, CFP®, chairman and CEO of RTD Financial Advisors, shared how as CEO of a planning firm with 37 employees and 500-plus clients, his approach is to look at how the firm will not only survive the COVID-19 pandemic, but thrive during this time.
“As CEO, the C right now stands for cheerleader,” Busillo said. “Our clients are really dependent on us to be strong and uplifting.” That goes for staff members, too. His firm is holding virtual happy hours and using Microsoft Teams to stay connected. And, an upside surprise for Busillo has been learning clients’ and staff members’ true character during this time in which we’re all being stress-tested.
Crises Are Recurring Events
Guy Cumbie, CFP®, reflected back on prior crises. The first one he experienced as a business owner was local—an F3 tornado that tore through Forth Worth, Texas in 2000, shutting down his office building. The second crisis was national—9/11; as a result, the FPA National Conference he was helping to organize in San Diego that year was cancelled.
“This pandemic is my first global crisis experience,” Cumbie said. He realized that despite two decades and three crises, he’s never had any formal training, so he enrolled in an online crisis management training program through Harvard Business School. This is where he learned the concept of “right of boom,” or ROB. The “boom” is the explosion, the event. We are now “right of boom” in the COVID-19 pandemic, but we’re still in the “shrapnel zone” as Cumbie said; we’re still experiencing business closures, illnesses, and death.
“As we continue to progress to the right of the boom, one of the big takeaways [for me] is that crises are not non-recurring events,” Cumbie said. “I’m going to take crisis management a little more seriously as a subset of risk management. It’s a deep dive I will do, and hopefully be less and less caught off guard.”
Don’t Overlook Human Capital
Evelyn Zohlen, CFP®, lives and practices in Southern California. Because a big earthquake is a not a question of “if,” it’s a matter of “when,” her firm as put together and tested a business continuity plan—what happens if an earthquake causes the electricity to go out for an extended period, or the building where her office is located burns down?
However, the COVID-19 pandemic has caused Zohlen to question the business continuity of human capital. She’s confident that at her firm, although relatively small, there is enough overlap that if she were to get very sick tomorrow, her clients and the firm would be OK. But want about solo practitioners, or firms with just two or three people?
“If you’re thinking right now, ‘I wish I’d done a better job [with business continuity planning],’ it’s not too late to reach out to a trusted colleague,” said Zohlen, “FPA is a big community of people
we like and trust. It’s not too late to find that colleague in the same boat and figure out, ‘How do we have each other’s back?’”
Business Continuity Is Not Succession Planning
As some solo practitioners on the call shared their struggles creating a continuity plan and/or finding the right partner to take over the practice, host Elizabeth Jetton made a point of clarity and distinction: finding the right partner to take over your firm is succession planning; business continuity planning is finding someone to step in temporarily during crisis situations.
And the group offered a few suggestions for finding the right person for your business continuity plan:
Find a study group. “When you are part of a good study group, those are pals you know you can trust, and they are ready and willing to pitch in and help,” Cumbie said. “That might not be the ultimate answer to business continuity planning, but it’s one of the best ways to make those connections.”
Lean on mentors. “I’ve been involved in the FPA Residency program for 20-plus years as a mentor, and over the years, many of my residents went out on their own,” Busillo said. “We’ve stayed in touch, and I have several relationships where we would be their contingency plan. So, look for mentors in your life; maybe they’re at firms that align with your values.”
Someone to help transition clients. “You can satisfy regulators by just naming a person; someone to help clients transition to another adviser, and not necessarily the person who has been named your successor.” said Tom McLean, CFP®. “And that gives clients peace of mind.”
Let go of finding perfection. “I found peace with not trying to find the perfect [fit], but I found a like-minded firm, and their charge is not to come take over my firm, but to be responsible for the orderly running of the firm and the proper caring of our clients, while finding an appropriate buyer [should something happen to Zohlen and her husband/business partner].”
And, Zohlen made sure that adequate compensation for that like-minded firm is part of the business continuity plan.
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Carly Schulaka is editor of the Journal of Financial Planning and the managing director of FPA’s publications team. Reach her at cschulaka@onefpa.org.
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