Are you doing enough to protect your staff and business?

As financial advisors, we specialize in preparing life plans for clients. How much time, though, do we spend on our business plans for what happens after our death? What happens to our staff the morning after we die? The future of your business could be determined by the first person who answers the phone the morning after you die.

Picture the scene of your staff at the office in shock about your death. They’re not prepared for what to do or say next. The phone rings, and it’s a worried client asking what will happen to their investments or policies now. The staff also are worried about their jobs and where their incomes will come from. The staff member panics and agrees that they’re also worried about the future.

The client shares this message of panic on social media, and the damage is done. I’ve witnessed it happening. It can be averted though.

Protecting your staff helps protect your business

It’s like a fire drill: We discuss and have plans in place before the event. The first priority is protecting your support staff by making them beneficiaries of a policy on your life that will provide them with three months of income. This will give them great peace of mind and security.

I also made a provision with a written agreement that my personal assistant will have three months of rent and other living costs provided if I die.

Using a life insurance policy is the most efficient way of making funds immediately available. As time is of the essence for your staff to receive support after you die, a trust for this purpose isn’t practical.

If you continue this discussion with your support team, spouse, business partners and executor of your will, you will give financial security to your team and loyal clients.

Helping clients who are small-business owners

Once you have your plan in place, start closely looking at other small businesses. They could also use a similar plan to provide security for their support staff and save their business. For example, for a doctor’s office, who will pay the nurses and receptionist after the doctor dies?

Make sure your plan is the best you have ever done so your business and staff don’t suffer needlessly after you die — and do the same for your clients and their businesses.

Derek Dingwall, of Benoni, South Africa, has been an MDRT member since 1981.

Read more ideas to help your business succeed:

• “Business Continuity Decision Tree”
• “Minding your own business: Building a financial advisory business takes a strategic approach”