![\"\"](\"https:\/\/www.iafp.ca\/planners\/wp-content\/uploads\/sites\/3\/Succession-planning.jpeg\")
<\/p>\nAn industry expert urged advisors to step up their game during IAFP\u2019s 2021 symposium.\u00a0<\/p>\n
<\/p>\n
Advisors aren\u2019t required to have business continuity or succession plans, yet their dealers are \u2014 leading to material questions around an advisor\u2019s ethical duty to plan ahead for their clients\u2019 sake.<\/p>\n
While too few financial advisors have created succession plans, there\u2019s \u201clots of guidance specifically from the industry on why we should be addressing [this],\u201d said Rod Burylo, investment fund manager consultant with Calgary-based exempt market dealer Axcess Capital Advisors Inc. He also has served in various chief compliance officer roles throughout his career.<\/p>\n
Burylo said that self-regulatory organizations and securities regulators require dealers to have business continuity plans so clients can be served without disruption, even during emergencies. That requirement is \u201ca good message to us [advisors]; if they require it of the dealership, it may be something you should be requiring of yourself,\u201d he suggested.<\/p>\n
He said dissecting the language used in FP Canada\u2019s practice standards can also lead to a \u201cvery strong\u201d argument in favour of having both continuity and succession plans to protect clients.<\/p>\n
Burylo led a Sept. 23 session on how ethics relates to both business continuity and succession planning for advisors for the Institute of Advanced Financial Planners\u2019 (IAFP) 2021 virtual symposium. Basic continuity planning is largely understood as emergency planning, he said, while succession planning involves advisors who are retiring and transitioning their books.<\/p>\n
Advisors without plans should recognize the negative optics and potential risks of not planning ahead.<\/p>\n
\u201cClients would find it ironic that professionals that are in the business of helping others prepare for a retirement \u2026 or a health-related matter that could arise, that so many of us don\u2019t in fact [plan] for ourselves,\u201d Burylo said.<\/p>\n
Advisors who do embark on planning must be sure to do so compliantly \u2014 especially when it comes to organizing, handling and protecting client data.<\/p>\n
Most advisors know client information cannot be shared with others unless clients provide consent. \u201cYet, what I see sometimes is when an advisor starts to think about things like a succession plan, they start to think about who would buy their book of business and have conversations about that book,\u201d and the value of the book is often disclosed, Burylo said.<\/p>\n
Since advisors may not want to prematurely warn clients about their departure plans, he added, \u201cthere are times when advisors might start to share client information\u201d without obtaining consent.<\/p>\n
\u201cFrom a compliance perspective, should there be a process in place that indicates to a client that at some point in the relationship, some of the information about them might be shared for a succession or business continuity plan?\u201d Burylo asked.<\/p>\n
He also stressed the importance of assessing potential book buyers for knowledge, certifications, long-term client-service capacity, future goals and overall character.<\/p>\n
\u201cIt\u2019s hard to measure character,\u201d he said, but a person\u2019s integrity and ability to follow through for your clients matters.<\/p>\n
While this may all seem daunting, simply beginning the planning process will be useful for maintaining clients\u2019 confidence.<\/p>\n