What’s the worst thing that could happen in your financial life? That’s a question clients must grapple with if they want to work with planner Robert Gerstemeier.

Risk management is always the first thing on his mind. He wants to make sure his clients have adequate emergency savings, health and disability insurance, and enough life insurance to cover survivors in the event of an untimely death. If they have a business, he walks them through disaster and succession planning for both the business and their investment portfolio.

There’s a very real — and very personal — reason for Gerstemeier’s focus on risk. The 42-year-old planner started his career in the U.S. Navy, eventually operating reconnaissance aircraft in the Persian Gulf and western Pacific. That experience, as well as the untimely deaths of friends and colleagues, put him face to face with his own mortality.

A more recent recall to active duty also underscored the need for contingency plans. “When you work for a company, you’re guaranteed to get your position back when you return,” Gerstemeier says. “But when you run your own business, you have no idea what’s going to happen. I was extremely nervous.”

COUNSELING PEERS

Even before he became a financial planner, Gerstemeier’s first “clients” were the sailors he worked with in the Navy. While serving as his squadron’s legal officer, he found himself educating them about getting out of debt, establishing savings programs and investing for retirement. He also developed pre-deployment seminars for the military, to stress the importance of executing wills and powers of attorney and preparing a detailed financial plan before an extended deployment.

No one can solve the emotional devastation of losing a loved one, but the military has programs in place to prevent survivors from being economically devastated, Gerstemeier says. The problem is that 18- and 19-year-olds often feel invincible and can get careless with beneficiary forms and other bureaucratic details: “Even if you have to hit them over the head with it, you want to make sure that all that paperwork is in place before these kids leave,” he says.

Frankly, Gerstemeier says, his own planning practice would have failed in 2009 if he hadn’t been practicing what he preaches. That’s when the Chicago- and Cincinnati-based planner received a letter telling him that he had been “involuntarily recalled to active duty” for a 15-month overseas assignment. He knew his wife and children would wait for him. But he wasn’t so sure about his clients.

Fortunately, Gerstemeier had a business survival plan — something he strongly recommends for any sole practitioner.

In addition to setting aside emergency savings and buying insurance products, Gerstemeier had sought out a technology consultant a few years after he started his practice to help with professional contingency plans. The consultant persuaded him to store his business records in the cloud so that he could gain access to the information from anywhere.

Gerstemeier also created electronic checklists for each client’s account, making it easier for someone else to step in and quickly get up to speed.

And Gerstemeier’s wife, Laura, became the final piece of the business survival plan. Though Laura mainly stays home with the couple’s three children, she was trained as a certified public accountant and has a master’s in business administration. The couple had earlier agreed that she should take the necessary financial planning exams so she could fill in if Gerstemeier “ever got hit by a bread truck.”

That was pivotal. When Gerstemeier’s deployment orders came in a few years later, he had just 90 days to get his affairs in order. Illinois securities regulators said he would need a qualified replacement to step in to keep his business running — so Laura, who had just obtained her Series 65, was conscripted.

“The military teaches you to have a backup plan,” says Gerstemeier, who will take over as NAPFA chairman in September. “You’re never going to be able to come up with a 100% solution, but you try to mitigate the risks as much as possible.”

LONG-DISTANCE COLLABORATION

Legalities are only the first hurdle in a people-centric business. So Gerstemeier wrote a letter to all of his clients, informing them about the situation and explaining how the firm would take care of their needs in his absence. Then he started making calls, hoping to talk to everyone before they got the letter.

“This was during the Bernie Madoff disaster and I’m calling my clients, saying you need to call me back at your earliest convenience,” he says. “It was tense. But when they realized what was going on, to a person, they all said, 'I’m comfortable. You’ve treated me well and I understand what you’re doing.’?”

During most of his deployment, Gerstemeier was stationed in Paktika, a rugged Afghan province just west of the Pakistan border. Military assignments don’t provide much time off, but the nine-and-a-half-hour time difference between home and Afghanistan helped, he says.

By the time Gerstemeier got up in the morning, it was the end of the previous day in Chicago. He could check email to see if Laura needed his advice for any client issues that had come up. At the end of his day, he would check email again. If Laura had had an issue in the morning, he would address it before he went to sleep.

He shares credit for the arrangement’s success with his clients. “I can’t say enough good things about the type of people I work with,” he says. “I didn’t lose a single client.”

Laura still assists with some of the firm’s administrative and accounting work, but was happy to hand off day-to-day responsibilities. “She gave me back the BlackBerry when she met me in the airport,” Gerstemeier says. But she’s studying for the CFP exam and will get more involved in the business as the children — now 12, 9 and 7 — and the practice grow.

THREATS TO A PRACTICE

To be sure, unless you’re in the military reserves, a deployment isn’t going to threaten your practice. But other events, including a long illness or disability, could. And while you can get insurance to cover medical expenses and some lost income, it’s a long hard road to rebuild if you lose your clients, Gerstemeier points out.

Unfortunately, there’s no one-size-fits-all practice survival plan. Like many planning challenges, finding the right answer starts with asking the right questions, Gerstemeier says.

“Pick a day — any day — and imagine that’s the last day you can operate your practice. What happens to your clients? What happens to you and your business?” he asks.

“I can’t give you a specific strategy that will make your practice survive,” he adds, “but you need to figure one out. The day the disaster happens is not the day that you should be first thinking about it.” 

Kathy Kristof, a Financial Planning contributing writer in Los Angeles, contributes to Kiplinger’s and CBS MoneyWatch.

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