Five top tips to reduce risk in your practice

By mharrison ·
August 21 2015

Five top tips to reduce risk in your practice

There are several factors advice business owners need to take into consideration in order to better manage the constant changes of the financial services industry.

Regardless of how successful your financial advice business is, it is constantly evolving. You engage new markets, new technology and new best practices.

This evolution is the reason why even small businesses have big websites and why websites are now designed and rendered to look good on a desktop monitor and the smaller screens of your tablet or smartphone.

In today's world, change is dramatic and, in business terms, quick. For an example outside our industry, look at restaurants.

Many now provide smartphone owners with free apps that access the bistro's daily specials, provide the interface to place an order and even to schedule delivery. It was unheard of not too long ago, but it's now a whole new marketing channel.

Technology changes, but so does your service area - whether you are serving Sydney or the whole world.

Competitors move in, nibbling at your client base.

Legislation changes, as we all know only too well, increasing your stress levels.

The space next door becomes available. Can you lease it and expand? Should you? Employees move on, new employees are hired.

New products or services are added, old ones are deleted.

Business change is inevitable. The more you understand it, the better you will be able to navigate it.

Change invariably creates risk

You can run the numbers a million times. You can conduct customer surveys. You can track website metrics after an online marketing initiative. You can collect, crunch and collate all the data, and still miss the mark.

You can project and predict based on past performance, but as the adage says: "Past performance is no indicator of future performance." It's an old adage because it's true.

All those satisfaction surveys, growth in company margins, expansion into new markets, increase in website traffic and time on site - all of this data is dated.

It shows what's already happened.

Prepare for change

If change has already happened, managing its impact is more difficult because you have fewer options available quickly.

The time to develop a change management program is long before big changes take place - so lesson number one: prepare for change.

Change in any business environment falls in to two categories: change initiated from within, for example, new product offerings; and change from without, such as a deep-pockets competitor who moves in next door.

Change management, whether internal or external, requires an understanding of risks and hazards, and the putting in place of strategies to mitigate or avoid them.

Top tips to reduce risk

Here are some tips to avoid, reduce or mitigate risks:

1. Store data in the cloud offsite - in case, all of a sudden, your office is flooded and company data is floating downstream.

2. Add multiple layers of cyber security to defend against hackers - update continually (weekly) virus and malware software.

Good security, from a hard-wired firewall to bulked-up employee passwords, can protect against data theft.

3. Insure everything. We are in the risk business - but do we adequately insure our own businesses?

Don't just carry basic commercial policies, consider things like the proprietary assets your business owns or uses.

Does your business own intellectual property of high value? Think about how can you protect it.

4. Perform a risk assessment of your business location - identify potential hazards, then plug those holes. What you can't plug should be covered by insurance.

5. Make a plan - have a change management strategy that helps you identify risks ahead of time and take steps to mitigate them now, before change causes a problem.

And don't let sleeping dogs lie: review your change management strategy regularly.

Michael Harrison is the independent chair of Synchron

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Five top tips to reduce risk in your practice

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