For financial advisors, the severity of the storm along with the memories of Hurricane Sandy and other natural catastrophes underscores the need for disaster contingency planning. While interfering with productivity, such disasters can also create reputational risk for firms that don’t have adequate backup plans in place.
Disaster planning can be a complex process, so some firms hire consultants to help ensure that no stone is left unturned. Either way, firms should keep the following aspects of disaster planning in place.
Preparation for disasters can be divided into various categories, including technology, human resources and communications. For technology, firms should ensure that they have redundant computer and data storage systems in place. Over the past few years, many advisors have embraced the cloud, or moving technology applications, data processing and storage to remote facilities that are maintained by vendors.
In such cases, firms’ disaster planning can consist of ensuring that their employees can access the cloud from their home locations as an alternative to working in the office. Employees’ homes, however, are likely to be located close enough to offices to be exposed to the same natural disasters that may interfere with regular operations, so advisors may want to assess if they should establish back up locations that are located further away from their offices.
The ideal distance should be sufficient to be out of the range of natural disasters that may adversely impact office locations but not so far that they can only be reached conveniently by air travel. Simply having such arrangements in place, however, isn’t sufficient. Indeed, firms should routinely test out their procedures by having employees travel to, and work from, remote locations.
The human resources and communication aspects of disaster planning entail training and maintaining a system for communicating with workers when office telephones are knocked offline. For example, firms should implement procedure for managers to contact their employees and alternative steps in the event that managers cannot be reached. The procedures should provide provisions for managers’ employees to also share in making phone calls in the event that telephone communications for managers are impaired.
Firms should also establish a telephone line with a recorded message that will direct employees to work in remote locations in the event of a storm. It’s important to note that text messaging tends to be more reliable during disasters, so firms should keep the method of communicating in mind in the event that regular phones and email are knocked offline.
Disaster planning should involve having written procedures in place for employees to follow in the event a firm’s office loses power or can’t be accessed. The document should identify backup office locations and the employees that should report to each facility. The plan should provide telephone numbers and email addresses for employees and similar information for employees’ relatives or other emergency contacts that may be able to help reach employees when disasters interfere with electronic communications.
Depending on the complexity of a firm’s technology resources, the disaster planning document may also need to include steps for accessing technology at remote locations. Some disasters, unfortunately, can occur during regular business hours and create the challenge of keeping workers safe while they are at their workstations, so firms should have procedures and resources in place for such events.
Resources should include emerging kits with dust masks and emergency food rations in the event that employees are trapped in their offices.