The process of identifying risks, assessing risks and developing strategies to manage risks is known as risk management. As a financial adviser, the ability to identify potential risks to your business is critical. Some risks, like client complaints and regulatory reviews, are inherent in the financial services industry. And when it comes to client relationship management, you’ll find risks you can control, as well as those you can’t.
Failure to manage risk could result in adverse actions by the regulators and to the detriment of your advice business. By understanding potential risks to your business and finding ways to minimise their impacts, you will help your business recover quickly if an incident occurs. Business risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents, natural disasters, information technology security threats, data-related risks, regulatory risk and client complaints.
Your risk management plan should detail your strategy for dealing with risks specific to your advice business. It is important to allocate some time, budget and resources for preparing a risk management plan and a business impact analysis
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The first step in preparing a risk management plan is to identify potential risks to your business. Understanding the scope of possible risks will help you develop realistic, cost-effective strategies for dealing with them. Thoroughly review your business plan and ask as many 'what if?' questions as you can.
Our risk management tool provides you with a risk description, allowing you to rate the potential risk, place a cost on that risk, determine preventative actions for that identified risk and set a date for when that action will be implemented.
Note: Natural disasters can be catastrophic and have prolonged impacts for individuals, regions and communities. The Australian Government has launched an enquiry into how prepared small businesses are for surviving the devastating impacts of disasters.
Start this assessment by selecting answers to the below questions: