You need a Plan B

By April-Lynn Levitt | November 16, 2012 | Last updated on November 16, 2012
3 min read

Do you have a contingency plan in place for critical illness, disability, or death?

We ask our clients this regularly, but often we don’t have a plan in place for our own business.

Read: Succeeding your business

Consider these recent cases. We knew a 39 year old with cancer who needed a year off work; a 55 year old with a debilitating case of shingles; a 50 year old who lost his vision overnight due to a stroke.

Some of these advisors had a contingency plan, and either stepped back into the practice when they were able to return to work, or had a successor in place because working was no longer an option.

Read: How to choose your successor

But we’ve seen cases where revenue suffers or the practice has to be sold at a less-than-optimal price.

Here’s how to create your Plan B:

Have proper insurance coverage

Have CI, DI and life insurance. This is easier to do if you have a handle on your business and personal finances. Do you know your monthly expenses? What are your recurring revenues?

Systematize your practice

Could someone figure out your business processes, or are they all in your head? Having a fully populated contact management system and documented procedures makes it easier for someone to pick up where you left off. We have seen cases where client service is on autopilot and can be looked after by support staff during shorter-term absences.

Read: Understand process, and thrive

Write a plan to cover short- and long-term emergencies

Who will look after your clients if you’re off for an extended period? Some larger offices may have resources to look after your clients temporarily. If you are a sole practitioner or in a small office, create this backup plan yourself. In one case, an advisor cultivated two younger advisors who would eventually purchase her book when she retired.

Clients could turn to them when she was away on vacation, and when she had a sudden illness and was unable to return to work it was easy to transition clients to these advisors. The retention rate was extremely high.

Consider support staff in your plans

What if key team members have to go on disability leave or die? Do you have a group benefits plan in place? What does it cover? Do you need additional coverage? How long could you have a vacancy without having to fill it? What would happen to your staff if something happened to you? Have you communicated these concerns to the team?

Plan in advance

We recommend at least five years before anticipated retirement.

Take your health seriously

Eat well, exercise and take time off to recharge.

April-Lynn Levitt, B. Comm, CFP, is a coach with The Personal Coach. April provides support to Western & Central Canada financial advisors. She has experience as an independent financial advisor and as a top Financial Consultant and Regional Manager in a Calgary office that managed $1 billion for physicians and their families. You can follow April on LinkedIn.

April-Lynn Levitt