Proposed Rule To Require Investment Advisors to Adopt Business Continuity and Succession Plans

The North American Securities Administrators Association (NASAA) has proposed a model rule requiring investment advisers to create and implement written procedures to address business continuity and succession planning in the event of the owner’s and other key personnel’s untimely departure or incapacitation or a natural disaster

The proposal seeks to ensure that advisers (especially small firms) fulfill their responsibilities under state securities laws to maintain business continuity, protect clients from interruptions in an investment adviser’s business, and mitigate client harm in the event of a significant business interruption. While the proposal is still in the commentary period, it is fully expected that it will become a regulatory requirement in 2015 and waiting until it is required could prove disastrous for your firm.

The NASAA’s proposal includes Model Guidance which covers a variety of issues that should be considered by investment advisers in developing business continuity and succession plans. Smaller firms should focus on the issues unique to their smaller size as well as the risks associated with their particular firm. The Model Guidance is broad and is designed to allow investment advisers to tailor their business continuity and succession plans in a manner cost-effective to their business models.   (

Compliance Advisers encourages you to read the proposed rule and to consider how an effective succession plan is necessary to protect your clients and your firm.  And, we can help.

Contact Compliance Advisers regarding your succession plan before it’s too late. We can help you prepare your own customized Disaster, Continuity or Succession plan.