Your part in the tragedy (V) – what to do

With the end of the financial year approaching there won't be a shortage of things to do in your office and your staff will have their hands full with the million and one tasks that already form part of your practice procedures.  I have no illusions about how welcome the suggestion that you consider adding a few more items will be.

But in light of the issues raised and described to you in the previous articles. I will continue and commend the following to you:

1.    Implement and carry out regular "fire drills" on the disaster plans and supporting resources for J Smith and ABC Ltd.

2.    Adopt a questionnaire that clients complete and update, that identifies the other advisers you will need to deal with "when it goes bang".

3.    Use your own practice's insurance broker to assist with these processes and provide you with a report outlining suitability of existing measures and obvious shortfalls.

4.    Advise clients of strengths and/or weaknesses and recommend a next step for them.

Well that was brave of me wasn't it. I've worked with a number of professional practices over the past 15 years and just about all of them agree that these are reasonable suggestions and their clients would be well served by them being implemented.  That's nice, but it's not the point.

They generally agree that when things go wrong the outcomes would probably be better for the client and the processes smoother and more predictable for the other professional practices involved... again nice to hear, but again it's not the point.

The point is how you add the commendations to the list of things that you do.

I look at the practices where I work closely with the staff and clients and I look at the practices that I have had to deal with at claim time. I am encouraged by the fact that there is an increasing area of overlap between the two.  In some cases the claim came first highlighting the problem and in others foresight identified the problem first. What I see is practices confronting the expectations of clients.

As part of the survey process we carry out with business owner clients for whom we are reviewing or investigating insurance resources, we specifically ask three questions:

(a)  Do you expect that your professional advisers will assist your business and estate with the resolution of debt and solvency issues when you become seriously disabled?

(b)  Have you told them what resources they will have at their disposal?

(c)  Have you discussed this issue with your professional advisers?

In the great majority of cases, the answers not surprisingly are:

(a)  Yes

(b)  No

(c)  No

What to do?   Well, I suppose the starting point should be dealing with the question of expectation - their expectation to be specific and yours too.

Would you like to be able to assist J Smith in using the proceeds of their Key Person policy to reduce or repay a debt of bank facility when he is undergoing on-going major surgery?  The answer could seem obvious but in my experience, what seems obvious lies within the dangerous and uncharted ground of assumption.  Let's leave the strictly personal decision that we would like to help another individual in trouble and concentrate on what your practice is able to deliver professionally.

Professional practices operate by virtue of well researched and resourced processes. If this is something that you have not specifically offered your clients but they have an expectation, whether unsolicited or unintentional, that you will be there to help, then a resource may be required from your end. It may be that you highlight your own deliverable in this area or that you highlight the deliverable of their other Allied Professional Advisers.

The relationship between J Smith and the accounting adviser is generally the strongest of all the professional advisers and it is only natural I suppose that you would be assumed to be the first person to turn to when tragedy strikes.  If you address this expectation with your terms of service, then resources can at least be put in place now, either by you or by J Smith.

Either way, the experienced insurance adviser can be of assistance.  Generally speaking we are involved in the claim process and we can assist by either discussing the process with J Smith or with you.

In my experience, once the accounting practice adopts a process to be involved in the claim, they generally become involved in the design and review of the insurance and structural resources. In "Your part in the tragedy (IV) - How it goes wrong", the outcome for J Smith was entirely dependent on the co-operative approach to the problem by the professional advisers who were ultimately involved. The process was and still is lead by the accountant.

Perhaps it's time to call a meeting with the people that you will be ultimately called upon to work with for J Smith. It may surprise you to find just how many J Smiths that you all have in common.

Allan Mearns is from Vitality Insurance Specialist, a broking practice working with individuals, their families, estates and businesses.

It is a resource available to individuals and their professional advisers. It gives people information to make better decisions and to have resources that they can depend on when the disablement process threatens to interfere with the rest of their life.

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