In the midst of hurricane, tornado and wild fire season, we witness the horrific destruction these events cause and try to comprehend where the recovery process even begins for the people, animals and businesses left in wake of these disasters. There is nothing as catastrophic as loss of lives and homes for the victims. Restoration of basic living needs are the primary focus for weeks, months and even years as financial assistance and restoration resources are stretched across the areas of need. Disaster recovery processes are continuously being tested and refined to better meet the needs of people and areas devastated by these events.
Considering natural disasters and particularly since the terrorist activities of 9/11/2001, the SEC has proposed all advisory firms be required to establish written disaster recovery and business continuity plans for the firm’s business operations. This allows advisors to meet their fiduciary responsibilities to clients in managing their assets as well as meeting regulatory requirements in the event of any kind of an emergency or disaster which may temporarily disable the firm’s operations or prevent access to our offices or client information.
In both a personal disaster recovery or a business continuity environment, the end goal is to get life and/or firm back to functioning and operating as it should. The immediate aftermath of a life disrupting crisis is not the time to evaluate how recovery would best be planned. Having a plan in place will help that recovery process go as well as it can in the event of an actual emergency.
The following portion of our firm’s Business Continuity Plan translates at most levels to a personal disaster recovery plan:
- Establish list of what minimum resources are needed to begin resuming life (or operations). This means essentials. For our firm it is our staff, communication with our clients and each other, crucial vendors/custodians, computers and internet service, access to client information and essential records/data, and an alternate location to use as a central office. Your personal list of essentials will include things such as a communication plan, shelter, food/water, plans for extended family, pets, transportation, etc.
- Create action steps for restoring or replacing each of these minimum resources. Details and contact information matter here AND you must be able to access this information through an alternate source if an original list/document is destroyed in the disaster. We have our complete business continuity plan kept both at select staff members’ homes and two electronically stored locations in the cloud. Each of our clients have at least two Altavista team members familiar with their investments and life/family who would be able to fulfill ongoing service for a client if any of our advisors were incapacitated or deceased. At the personal level, if desired, extend this step of the plan to cover other non-life essential items such as family photos, legal documents, life insurance policies, etc. Having electronic back up copies of these items make restoration possible after the initial crisis is handled.
- Distribute and communicate the plan to your family members and/or trusted contacts or in our case staff members (think fire evacuation plan of where to meet and how to contact each other).
- Test the plan periodically. We practice our business continuity communication plan annually, on a non-business day, through a group text message to assure we would all be able to communicate our safety, whereabouts and accessibility for implementing next steps. We also simulate restoring files/data and important contact information from our secondary back up resources.
- Upon reviewing or testing the plan, update critical information and revise the plan to fill any gaps discovered. This is the time to identify and correct what might be missing and what didn’t work.
We always envision our lives and daily activities continuing as usual but as we see all too frequently, things can change in an instant. Understanding how to assess the impact of a disaster and having a plan is a way to at the very least make a recovery process easier to begin and navigate.