Business Continuity & Succession Planning
A written plan for disasters and for the death or disability of key people.
What is Business Continuity & Succession Planning?
Advisers must have written procedures for continuing operations after a disruption: backing up and recovering records, alternate locations, communicating with clients and regulators, and protecting client assets. Succession planning covers what happens to clients if a key person - especially a sole practitioner - dies or becomes incapacitated.
Business Continuity & Succession Planning: a worked example
A solo adviser designates another firm to service clients if the adviser becomes unable to work.
More terms in Ethics & Fiduciary Obligations
Form ADV Part 2 Brochure Delivery
Deliver 48 hours before the contract, or at signing with a 5-business-day exit.
Advisory Contract Requirements
Written, specific about fees, no assignment without consent, no waiver of rights.
Assignment of an Advisory Contract
Transferring a client contract requires the client's consent - including by change of control.
Performance-Based Fees & Qualified Clients
Allowed only for qualified clients: $1.4M with the adviser or $2.7M net worth (from June 29, 2026).
Prepaid Fees & Financial Requirements
Prepayment over $500, six months ahead, triggers net worth and balance sheet rules.
Custody
Holding, or having authority to obtain, client funds or securities.
Discretionary Authority
Deciding the asset, the amount, or buy versus sell - without asking first.
Third-Party Trading Authorization
Anyone other than the owner needs written authority to trade the account.