Business Continuity Planning – A Survivor’s Story

When I began working for Pinnacle in September, 2013 I was new to the world of financial advisory firms. I faced a steep learning curve in my first few months here. Just before my arrival, Pinnacle launched PRISM, its solution for business continuity and succession plans for independent RIAs. When I began to familiarize myself with PRISM it hit close to home.

Full disclosure. My father was not a financial advisor. I am sure you will see, like I did, that his story is not unique to his profession. It is a story that could be written of any solo small business owner. My father was a mechanical engineer and owned and operated an engineering consulting business for nearly twenty years. He worked from home, employed several associates and planned to sell his business when it was time to retire.

Both of his parents lived into their late eighties and many of his parent’s siblings lived well into their nineties. My father never had any significant health issues, nor had he ever been seriously ill. There was no reason to believe that he would not live to a ripe old age like his family before him. However, one night he was watching tv at home with my mom. He sat up in his chair and grabbed his head. He told her something was terribly wrong and then he was gone. He was 65 years old.

He died without warning and he died without a business continuity plan. He left no handbook, no instructions. I have three brothers. None of us are engineers, nor anything close. My mother was a school teacher her whole career. Not one of us was prepared to step in to take over the business. Yet, it was my mother that had to take on the task of winding down his business.

Following someone’s death, there is significant amount of “business” that needs attending to – executing the will, settling the estate, transferring assets into the survivor’s name. The list is endless. All of this comes at a time when a survivor is also dealing with an unfathomable loss and the grief that comes with it. Getting up in the morning to face the day can itself be a challenge. Add to that the responsibility of running a business you know nothing about, caring for clients you don’t know and honoring existing obligations, life can feel almost insurmountable.

I will never forget when my mother and I went to the courthouse to execute my father’s will. The court clerk said to us “I don’t know why people always make their spouse the executor of their estate. The last person who should be responsible for this is the one who was closest to the deceased. They should only have to worry about taking care of themselves.”

In my years at Pinnacle I have heard every reason to not put a plan in place – I don’t have time. I can’t find the right successor. It’s not a requirement. I’m never going to die. You name it. I’ve heard it. And every time I do, I think of my dad and I hear that clerk’s words in my head. The fact of the matter is this: Dealing with the “ordinary” reality and responsibilities after someone dies is enough.

It took my mother the better part of two years to finally close out the business. There were contracts that needed to be fulfilled, projects that needed to be finished and bills to be paid. She worked to fulfill the company’s obligations and closed down the company without having taken a salary. Because she was unable to sell the company, she also missed out on adding the value of the business and the years of my father’s work to her retirement accounts.

Don’t let something like this happen to your family. There are a variety of continuity plan options available to you as financial advisor. Pinnacle offers a simple, straight forward one – PRISM – that could work for you. If PRISM is not the right solution for you, find one that is. Your family will thank you for it.

Pinnacle Advisor Solutions is a division of Pinnacle Advisory Group, a Registered Investment Advisor