Succession and contingency planning for financial advisers

As a financial adviser, your basic function is to ensure that your clients make provision for the foreseeable, as well as the not-so-foreseeable future – the things that can happen, and those that will.

Often, in this regard, we are more concerned about our than we are about ourselves. A recent ruling by the Financial Services Tribunal should serve as a timely warning, especially for smaller practices, to get their houses in order.

The owner of a small practice, of which he was the only member, passed away. It seems he was making provision for a possible replacement, but after his death, his wife, who inherited the business, ran into all kinds of trouble. Eventually, she suspended the applicant in the case before the tribunal, but lifted the suspension, as it appears she became aware that she did not follow due process.

A second suspension followed, as well as a disciplinary meeting, chaired by an attorney, who found the applicant guilty on a number of charges, including fraud. The allegation was that the applicant had forged the initials of the late husband on his employment contract next to handwritten insertions by the applicant.

Following his dismissal, the applicant was given 10 days to make written representations. A request for an extension was refused. A new set of attorneys also requested that the deadline be extended but, despite following up, heard nothing more from the respondent.

In addition, the widow did not make available the record of the disciplinary hearing, despite both the applicant and the tribunal requesting it.

On the basis of the above, the debarment was set aside, and the matter was referred to the FSCA. The tribunal noted that usually, in a matter like this, the case would be referred back to the decision-maker, but in this case the widow appears to lack the required objectivity, and any further debarment will lead to an application based on a perception of bias.

Contingency planning

The terms “insurance” and “assurance” seem to be bandied about these days as if they are the same thing. I recall being taught in my early days that insurance covers you against things that may happen, while assurance makes provision for what will happen.

Succession planning is what you do in the belief that things will work out as planned. Contingency measures need to be in place in the event that they do not, which, in these days of Covid, is a stronger possibility than in the days of yore.

Let the example of the case discussed above be a friendly reminder to review your plans regarding your departure, be it on time, or prematurely. This time, view it from your own perspective, rather than a compliance one.

In Lighter Wyn

While on a funereal note, I have to share some thoughts under the heading “Who said cemeteries aren’t funny?” sent to me by Roche Cowley, our most prolific contributor to this column on funny inscriptions on tombstones.

In Thurmont, Maryland:

Here lies an atheist, all dressed up and no place to go.

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On the grave of Ezekial Aikle in Nova Scotia:

Here lies Ezekial Aikle, age 102. Only the good die young.

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In London:

Here lies Ann Mann, who lived an old maid but died an old Mann. Dec. 8, 1767

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In Ribbesford, England:

Anna Wallace

The children of Israel wanted bread,

And the Lord sent them manna.

Clark Wallace wanted a wife,

And the Devil sent him Anna.

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In Ruidoso, New Mexico:

Here lies Johnny Yeast. Pardon him for not rising.

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In Uniontown, Pennsylvania:

Here lies the body of Jonathan Blake,

Stepped on the gas instead of the brake.

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In Silver City, Nevada:

Here lies The Kid,

We planted him raw.

He was quick on the trigger,

But slow on the draw.

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A lawyer’s epitaph in England:

Sir John Strange.

Here lies an honest lawyer, and that is Strange.

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John Penny’s epitaph in Wimborne, England:

Reader, if cash thou art in want of any,

Dig six feet deep and thou wilt find a Penny.

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In a cemetery in England:

Remember man, as you walk by,

As you are now, so once was I.

As I am now, so shall you be,

Remember this and follow me.

To which someone replied by writing on the tombstone:

To follow you I’ll not consent,

Until I know which way you went.