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If your business went up in flames could you keep working?

Having a business continuity plan in place for your firm’s systems is an adviser practice imperative. Barry Neilson, business development director at Nucleus, explains

One of the key requirements highlighted on the FCA’s application form for authorisation as an adviser firm is ‘a brief description of the business continuity disaster recovery plan’. The form goes on to state that ‘these arrangements should be regularly updated and tested to ensure effectiveness’.

So not only is a sound, business continuity plan an FCA requirement, it will ensure your practice can get back up and running faster after a disaster such as a fire, flood or back office systems failure.

In a client-led, 24/7 advice industry, it has become crucial for adviser firms to provide an uninterrupted service, unaffected by external influences. So any adviser firm putting together a business continuity plan (BCP) should work out all elements that are essential to keeping the business going, with a contingency plan for loss of client files as a priority.

A step-by-step guide

There are four essential steps to take for a successful, robust BCP, the first one being to look at all the activities that take place in your business such as putting together client files, tax planning and report writing; the key staff who perform core tasks for clients and to understand the impact if these activities don’t happen after a certain amount of time. Carrying out this first step means you understand the tasks that need to be prioritised – and why.

The second step is to develop a disaster recovery strategy by having a think about scenarios that would help you meet recovery timescales identified in the first step. Your strategy should consider immediate assessment of the situation such as loss of all on-site client files or client data following an unexpected event, short-term recovery of your advisory firm and longer-term recovery.

The third essential step is to create your BCP. The plan should highlight who needs to do what and when, contacting clients to rearrange meetings for example, taking views from each member of staff in your practice up to partners. The plan should clearly list all relevant contact details including details for any third party suppliers so critical information is held in one place.

Checklists should also be put in place, with instructions for the activities to be undertaken once the disaster has happened such as looking to retrieve client fact finds or client illustrations, making clear who is responsible for each task. The checklist could be sub-divided into categories under headings such as:

• immediate response

• incident detection and preliminary assessment

• evaluate disaster impact

• information technology.

It’s important that an adviser firm’s office location is also considered. It may be that the office needs to relocate urgently to a third party disaster recovery facility, so any plan should detail how the practice can get up and running elsewhere with minimum disruption to the business and to the needs of your clients.

It’s vital too that the plan is communicated to everyone in the firm, that all staff are fully aware of their responsibilities and that it’s fully embedded into the culture of your practice to ensure it remains effective and up to date.

Finally, test the plan and make sure the plan is readily available if disaster strikes and your back office system fails. This point is essential because if you can’t find a copy of it when you need it, chances of a quick recovery are limited. A copy of all key staff contact details should be kept in a secure location off-site too. It’s not unknown for emergency procedures to kick off only to find that a paraplanner, for example, cannot be contacted.

Regular health checks

Any robust BCP should be reviewed regularly. Testing the plan will help highlight any weaknesses within your firm and allow you to make revisions. During this process, the importance of communication with fellow advisers in dealing with an emergency is often revealed.

There’s no doubt that a disastrous event can destroy an adviser firm. However, following an unexpected systems failure or flood, some firms are forced to rethink how they operate while they return to ‘business as usual’ making for some long-term improvements to business efficiencies.

Adviser practices that fail to put a proper business continuity plan in place are putting their business at risk.

So always be prepared, expect the unexpected and review your business continuity plan regularly.

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