Contingency Planning Info Sheet

Contingency Planning FAQ's

A contingency plan (also known as a continuity plan) is a written document indicating that in the case of death, disability, or loss of license, your practice will be purchased by or serviced by another advisor and your beneficiaries will receive a specified amount in proceeds.
All business owners should have a written contingency plan.
The individual looking to be protected by the plan.
A valuation is not required to complete a contingency plan, but is encouraged as this will help you/us formulate a more reasonable valuation method in your plan, versus using simple industry averages.
No. SRG has multiple solutions if you do not have a designated partner.
Yes, you should still complete a contingency plan. Insurance is a way to fund a contingency plan, but many plans are not funded with life insurance. Either way, a life insurance policy does not take care of your business or clients and it does not result in maximum value to your beneficiaries.
From a compliance perspective, those affiliated with a broker-dealer need to ensure they comply with FINRA’s continuing commission policy at the very least. If there is no bona fide plan in place (e.g., written plan), it is very challenging to get any value out of the practice.

This varies significantly based on the type of practice and payment terms – as this is dependent on how much risk there is and who assumes that risk. Common discounts range from 0% up to 35%.

Yes, we do! We believe broker-dealers are a great resource for many, many things. But a broker-dealer being your backstop upon a death, disability, or loss of license is not one of them. In any of those circumstances, the broker-dealer’s goal is to retain the assets and maintain a good public persona. Your goal is to ensure that your beneficiaries are taken care of and receive the value you have spent a lifetime building.

We request you complete a contingency questionnaire. We have a short data gathering worksheet that will allow us to take in the details of your business and personal preferences so we can help provide a plan that meets your needs.

You should review your contingency plan annually. A thorough review includes determining if your contingency partner is still a good fit for you and your clients, determining if the methodologies applied are still appropriate, and updating the multiples, if applicable.

SRG has years of experience helping to set up these types of plans up for our clients. We know your industry. Plus, we have helped our client’s family’s and legal counsel put these plans into action when something has happened. This is the experience we bring to each client’s plan.

We strive for excellence and, as a result, we are always learning, adapting, and revising our deliverables and resources to ensure that you receive a fair, accurate, and timely solution as the industry changes.

We are neutral. We are not affiliated with a broker-dealer or custodian and can provide the advice that is best for you. We also pride ourselves on service – providing high-touch, high-quality solutions to our clients.

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(503)427-9910

 

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Julia Sexton, CVA, Director of Strategic Organizational Planning

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Courtney Sobkow, Project Coordinator

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