Advisors are stewards who direct, guide and care for the financial wellbeing of their clients.
La Vista, NE (PRWEB) October 08, 2012
Recognizing a critical gap in advisors’ understanding of the difference between continuity plans and succession plans, Securities America has designated October as “Continuity Planning Month.” The independent broker-dealer is providing educational webcasts, agreement templates, a video and other resources to help advisors stop procrastinating and put a written plan on file.
“Advisors who lump continuity planning into succession planning miss the point: the risk of dying today versus the relative certainty of retiring tomorrow,” said Roger Verboon, a senior practice management consultant at Securities America who coaches advisors about continuity planning.
TALES FROM THE TRENCHES
Securities America advisor Tim Boyd of San Diego said a continuity agreement would have greatly helped in the fall of 2008, when the industry faced a financial crisis and his office partner died suddenly while jogging.
“My practice did what we could to talk to clients and reassure them, but because my office partner and I didn’t have a formal agreement, I couldn’t give the clients any recommendations or transact business for them,” Boyd said. “Although I was the natural person to help the clients, my office partner’s wife was suddenly considered the owner of his business. She wasn’t licensed, and to make things worse, she became ill soon after his death.”
Eventually, roughly five months later, Boyd and another partner bought the book of business from the widow. Boyd and the other advisor now have a mutual, verbal agreement to cover each other’s practice in the case of sudden death or impairment. They plan to put that agreement in writing with the help of templates and resources from Securities America.
“Clients have asked me what happens if I’m not around or if I retire,” he said. “I want to have an answer that shows my commitment to them – whether I’m physically able to provide services or not.”
COMMITMENT TO HELP ADVISORS
In addition to providing instructional materials and a legal template, Securities America is also helping advisors match up and create mutual continuity agreements.
With just 73 continuity plans currently on file (out of 1,600 advisors), the company is asking advisors to take the Continuity Challenge this month and emphasizing that request with a proactive calling campaign. Advisors who accept the challenge will commit in October to having a continuity plan on file with the Securities America home office by the end of the year. Advisors who complete the challenge will be allowed to place a continuity verification seal on their website to assure clients and prospects that their investment accounts will be taken care of if the advisor suddenly dies or becomes incapacitated.
“Advisors are stewards who direct, guide and care for the financial wellbeing of their clients,” said Kirk Hulett, Securities America executive vice president of strategy and practice management. “In focusing their attention and expertise on clients, advisors may overlook their important role as stewards for their family and their employees, whose well being is also dependent on the advisor. A continuity plan protects all the people under an advisor’s stewardship – family, employees and clients.”
MOST CRITICAL ELEMENT
While succession planning has been a hot topic in the industry for some time, Securities America is emphasizing the continuity aspect as the most critical.
“Like a succession plan, a continuity plan lays out what you want to happen to your practice when you are no longer running it,” Hulett said. “Unlike a succession plan, a continuity plan is implemented immediately, rather than over a period of months or years due to an unexpected disruption in your ability to work. Also, a succession plan typically assumes you will not return to run the practice; whereas a continuity plan must address the possibility that you will.”
Securities America also distinguishes continuity planning from disaster recover planning.
“In a disaster – a fire, earthquake, tornado or flood – the advisor is still available to make decisions, lead the staff and communicate with clients,” Hulett said. “In contrast, a continuity plan helps get the staff, family and clients through a period when the advisor is unable to manage the business due to illness, injury or death. So when you look at the planning continuum for financial practices, the continuity plan is really the most critical. The disaster and succession plans can be built outward from the continuity starting point. That’s why we’ve focused our attention this month on encouraging advisors to address continuity first.”
About Securities America
Headquartered in La Vista, Neb., Securities America Inc. is the nation’s eighth largest independent broker-dealer (as ranked by Financial Planning magazine, June 2012, based on 2011 total revenue). For more than 25 years, Securities America’s mission has been to foster the success of financial professionals so they can provide quality, objective counsel and services to their clients. Advisors benefit from the firm’s industry-leading programs in practice management, advisory services and retirement income distribution, supported by state-of-the-art technology. Founded in 1993, Securities America Advisors Inc. is an SEC-Registered Investment Advisory firm that offers investment management, financial advice and financial planning through a national network of independent financial advisors. Securities America Financial Corp. is a wholly owned subsidiary of Ladenburg Thalmann Financial Services Inc. (NYSE MKT: LTS). Securities America received the inaugural Thought Leadership Award from the Retirement Income Industry Association in March 2011. Additional information is available at http://www.securitiesamerica.com.