What happens if you go before I go?

Your personal and professional goals are incredibly important to you. You may have spent, or will spend, many years working with your financial planner to manage your risk, savings, and investments so that you can protect and reach those goals as efficiently as possible.

However, what if something happens to disrupt this picture? What if your financial planner unexpectedly passes away or becomes disabled?

It is extremely important to understand what will happen to your risk and investment portfolio, your financial plan, and all your financial information and personal documentation if something were to unexpectedly happen to your financial planner.

You need to know what contingency plans your financial planner has in place to ensure a seamless transition of his or her responsibilities to a suitable replacement planner who will continue to look out for your best interest.

Whether you are looking to engage with a financial planner for the first time, changing planners, or you are already enjoying a long-standing relationship with an existing planner, you need to ask some hard questions about how your financial needs will continue to be met when your financial planner is no longer around.

What succession or continuity arrangements have you made?

You are dealing with a professional that is in the business of helping people plan for both the unexpected (contingency) and for eventualities like retirement (succession). You should expect that your financial planner has his or her own future mapped out as well.

Your financial planner should have a sound, documented arrangement in place with an appropriately licensed, qualified, and experienced successor, to ensure that your needs continue to be met in case of their planned or unplanned exit from their role.

You might also want to discuss whether the individual taking over the responsibility of your financial planning is someone affiliated with the existing practice. If not, it could take months to transition your financial portfolio and data and this may delay any financial review meetings or transactions that may have been scheduled to take place over the disrupted period.

In this case, there is also no guarantee the replacement planner will offer the same financial solutions or fees, meaning your portfolio may undergo significant changes and you may even end up paying more for the same service in the future.

How safe is my personal data if anything happens to my financial planner?

The Protection of Personal Information Act (PoPI) strictly regulates exactly what businesses may and may not do with your personal data. This includes how that data is handled at any point before, during and after the termination of your relationship with that entity.

Your financial planner’s succession plan must include details of the transfer of your personal and financial information in a secure and structured manner to protect you from having your information accessed by any parties outside of your contracted relationships.

Conclusion

Schedule a meeting with your financial planner to discuss how you will continue to receive the best possible service in the event that they are no longer able to manage your portfolio.

We suggest that you specifically discuss, “Who will take over the relationship if something happens to them?”, “How much experience does this person have?” and “How many clients do they already have? Do they actually have the capacity to continue meeting your needs right away?” This last point is crucial, because in a worst-case scenario it is highly likely that all of your financial planner’s clients will seek assistance the moment something happens and a new planner steps into their role.

Also, you may also want to ask one or more of the following questions: “Do I get a say in your succession planning decisions?”, “Will I have a chance to speak to this other planner before he or she takes over my portfolio?”, or “Will I have the option to leave that planner altogether and take my portfolio elsewhere if that’s ultimately what I would prefer to do?”

Finally, ask your planner how often they update their succession or contingency plans. Just as you should update your will or estate plan regularly, it is imperative that every single financial planner reconsider his or her contingency and succession plan on a regular basis.

If you are looking to work with a financial planner that has invested in the services of an industry-specific business coach in order to meet the highest industry standards for client care and business management, please click on our ‘Call me back’ service.

Old Mutual Wealth is an advice-led wealth management business, aimed at providing financial planners and their clients with a full suite of industry-leading strategies and services. For more information, please visit our website: https://www.oldmutual.co.za/wealth