You Need Proactive Risk Management

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Picture this scenario: you find the perfect employee. You groom her and train her to be your right hand—the one person (other than you) you need to keep your practice running smoothly. Then some other company comes and woos her away, promising a bigger salary and a better career path.

She leaves and you’re scrambling. Nobody knows how to do her job. Your business slows down because you need to do her job and your job until you can find somebody else. Then when you do find somebody else, you have to take the time to train them.

That scenario presents a risk to your business.

Vanessa Oligino, director of business performance solutions at TD Ameritrade Institutional, in her October FPA Annual Conference presentation, “Securing Your Firm’s Future,” said addressing a situation like that before it happens is part of proactive risk management.

Oligino explained that proactive risk management is about protecting your brand, reputation and future. Part of that proactive risk management is ensuring the continuity of your business in the event of a change to your team.

Oligino provided tips to attendees to ensure that your greatest asset—your team—is engaged and solid in case of blips like this.

Have ongoing communication. This will help you know what’s going on with your key employees. Are they feeling unhappy? Are they feeling stuck or like you’re not giving them enough challenging work? Is their work/life balance off? Are they burning out? Does the career trajectory you offer them match what they’re looking for? Are you paying them enough? Offering attractive benefits?

Have a plan. Have a plan for major “in case” scenarios such as: if an employee commits fraud; if there’s a natural disaster; if you make a bad hire; or if a key employee leaves. Oligino gave the example of the protégé you trained who is the only one who knows how to do her job. She recommended having something similar to understudies to each key role in case they leave, there will at least be one other person who is able to do their job.

Stay up-to-date with compliance and legal requirements. Make it a priority to update your employee handbook. Ensure you’re up-to-date when it comes to compliance issues and conduct annual compliance training.

Verify, verify and verify again. Ensure your employees are verifying that the senders of emails they’re exchanging with clients are, in fact, being sent by the clients. In more than one session at FPA Annual Conference, presenters talked of planners “verifying” information via email because the sender knew information only the client would know only to be the victim of fraud.

“Prioritize making progress on areas of vulnerability,” Oligino said. “There is no risk to your business that is safe to ignore.”


Ana Trujillo Limón is associate editor of the Journal of Financial Planning and the editor of the FPA Practice Management Blog. Email her at Follow her on Twitter at @AnaT_Edits.


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