Are you prepared for an emergency?
We don’t want to think about these things, but we have a responsibility to plan. As financial advisors, as well as family members, our firm has planned and prepared for events which we hope don’t occur anytime soon.
By sharing the planning that we have done, we want to re-assure you as our clients. We also think sharing this information with you may be helpful, in the hopes that you consider steps that you may want to take to be better prepared.
As a registered advisory firm, we have a fiduciary duty to always act in our clients’ best interest, as well as to meet various compliance rules. One of these requirements is that we have disaster recovery plans and have done contingency planning in the event of various emergencies. The following are some of the business and contingency steps that we have taken, which could be helpful in various situations.
A few years ago, we switched from having a server stored in a closet in our office to a “cloud” or “hosted” environment, with a Troy, Michigan based firm. By switching to this cloud environment, we can access all of our computer systems via the Internet from anywhere with an Internet connection. If our building was damaged or there was a power outage which affected the office location, we can work remotely and be functional. There are also significant security benefits by using this outside computer firm, which has full-time computer and security specialists. Additionally, they have multiple back-up plans and locations themselves.
For documents, notes and paperwork that are not already saved in our computer system, we are taking significant steps to scan in these items, as an additional backup measure. All client applications, forms and trade documents are stored redundantly on our system, by BAM, as well as by Fidelity, as the custodian (for applicable items). We have other detailed steps and plans, which are in our firm’s Disaster Recovery Plan document, which is reviewed and updated annually.
If something were to occur simultaneously to Keith and myself, we have entered into an agreement with the advisory firm related to our back-office firm, BAM Advisor Services. Buckingham Asset Management is one of the largest independent advisory firms in the country. If something was to occur to both of us, Buckingham would immediately run our firm, be in contact with our clients and be able to provide advice. There are legal steps involved in this potential transition, but the major point is that we have taken steps to handle this worst case scenario. We were the first firm to enter into such an agreement with BAM, which many others of their 150+ client firms have subsequently done.
In the event that either Keith or I was to die prior to retiring, we have a buy-sell agreement, which is funded with life insurance. This would provide funds both to the firm, to assist in handling a transition period, as well as provide funds to the respective family.
Let’s talk tech now. What if Brad suddenly went into the hospital or had an emergency? What if Brad could not access his phone or iPad, or lost all his technology devices? Keep in mind, all of my mobile devices and desktop computer have passwords to gain access to them, for security purposes. Other than the obvious health concerns, I want to have a way that others who needed to would be able to access business and personal information, as appropriate. Again, I have a responsibility to my family, my clients and Keith, my business partner.
This scenario could happen and is something that each of us should plan for. In this emergency scenario, I would not be able to provide the login information to access my phone, iPad or desktop computer, and potentially all of these devices may be gone or inaccessible to the people who need this critical data, due to my condition or other circumstances.
How would bank accounts be accessed? How would business records be accessed? I have stored all of my computer login and passwords in a password manager program called 1Password. By using this program, all this critical data is stored in one place, which is very secure and I have used different and complex passwords. Additionally, I have stored many important business documents (not client data) in a separate cloud-based program, as an additional backup measure. But how would someone else be able to get to all this information?
To access this important information in an emergency situation, 1Password has recently created an “Emergency Kit,” which is a one page form that has special data to enable someone else to access my 1Password account via the Internet from anywhere. I have provided this Emergency Kit page in a sealed envelope with specific instructions to close and trusted individuals, my wife, Keith, as well as two others with business relationships to our firm. In an emergency situation, one or more of these individuals would be able to remotely access 1Password. This would allow them to access other critical data, as needed.
By using 1Password, I have created very secure and different passwords for my many business and personal logins. By going the next step and preparing this Emergency page, I am confident that others would be able to access my devices and login data, in the event that I was incapacitated.
I truly hope this 1Password Emergency Kit is not necessary. However, I feel much more confident and secure that if there was an emergency situation that my family, clients and firm will be able to effectively handle important matters.
I hope providing this information is helpful to you, to inform you of the planning that our firm and I have done and to assist you in thinking about how you can better prepare yourself and your family.
Just like in the financial markets, no one knows when an “unexpected” event will occur.
If you are a client of our firm, I hope you appreciate the planning we have done to keep your data secure, but accessible, in various situations.
If you are not a client of our firm, are you comfortable with the planning for these types of scenarios that your advisor has done? Is it adequate? Is this a discussion you should be having?