Read the Show Notes
The Truth About Advisor Contingency Planning
In the first-ever episode of The SRG Exchange, the SRG consulting team comes together for a candid discussion on one of the most overlooked — and most essential — components of running a financial advisory firm: contingency planning. Drawing from real client experiences and day-to-day advisory work, the team breaks down what advisors often misunderstand, what regulators actually expect, and what a truly functional continuity plan must include.
This conversation sheds light on the operational, legal, and relational challenges that surface when a plan fails — and offers practical steps to help advisors protect clients, revenue, and family long before an emergency occurs.
Why Contingency Planning Still Falls Short
The episode opens with a frank acknowledgment: while nearly every advisor knows they should have a contingency plan, very few have one that would actually work in practice. The team discusses common gaps they see across the industry, including:
plans that exist only on paper and don’t reflect firm reality
unclear successor instructions
incorrectly structured agreements that fail under pressure
BD or custodian forms mistaken as full-fledged plans
They explain why these gaps become critical risks — not just for compliance, but for clients, staff, and family members who are left scrambling.
Understanding What a Real Plan Looks Like
From valuation considerations to internal decision-making authority, the team outlines the building blocks of a functional, actionable plan. Key insights include:
Why a contingency plan must be tied to a firm’s legal entity structure
The importance of identifying who actually has the authority to take over
Why buy-sell agreements are not always enough
How entity maintenance impacts continuity readiness
The role of service agreements, compensation, and communication plans
They emphasize that effective contingency planning is not a one-size-fits-all model — it must be tailored to the firm’s ownership, structure, and growth stage.
Lessons From the Field
The discussion includes stories and real scenarios drawn from SRG’s consulting work — both successes and cautionary tales. Advisors will hear:
what happens when documentation doesn’t match operational reality
how unexpected disability or death affects valuation and transition options
why even well-intentioned plans break down during crisis
how firms that plan proactively preserve value and avoid chaos
These examples ground the conversation in real-world impact, illustrating how preparation (or lack of it) plays out in practice.
Practical Guidance for Advisors
The consultants share clear steps advisors can take to strengthen or build their plan, including:
conducting a full review of current agreements
validating successor roles and responsibilities
documenting operational steps for continuity
maintaining updated books, records, and entity documents
ensuring clients know the firm has a plan in place
They also discuss how often plans should be revisited — and why regular maintenance is just as important as initial creation.
Conclusion: Protecting What Matters Most
The episode closes with a reminder that contingency planning is not just a compliance requirement — it is a fiduciary responsibility. By proactively addressing these issues, advisors protect their clients, their staff, the value of their firm, and the people they care about.
The clear takeaway: a contingency plan isn’t complete until it works in real life, under real pressure. Advisors who invest the time to get this right are better positioned to navigate the unexpected and maintain stability for their business and the people who depend on it.
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