I recently heard about a question a client put to one of our advisers, almost apologetically: “And if something happens to you?” It was the most sensible question in the whole meeting.
The adviser told me about it afterwards, slightly unsettled. Not because the question was unfair, but because in fifteen years nobody had asked it so directly. Clients choose an independent wealth manager largely because of one person. That is the strength of our model. It is also, quite honestly, its most obvious vulnerability.
Why Key Person Risk Is Rarely Discussed
Few firms discuss key person risk in wealth management openly. Banks usually address it through the depth of larger teams. Independent firms often address it more quietly, because talking about it can feel like admitting a weakness.
What changed my view was realising that the client was not expressing doubt. She was expressing trust. She wanted to know that the relationship she valued would outlast an illness, a retirement or simply a bad year.
Continuity as a Design Question
Since then, I think of key person risk less as a threat and more as a design question. A few things make a real difference:
- A named deputy who knows the family, not just the file
- Documentation of the reasoning behind decisions, not only the decisions
- Regular joint meetings, so the client starts to know a second face long before it is needed
- A clear answer to the question, given before the client has to ask
None of this changes the personal nature of the relationship. It protects it. A client who knows there is continuity can invest more trust in the person, not less.
I suspect most families think about this more often than they say. For those who advise them: how do you address continuity in your own relationships, and when do you first bring it up?
Source: https://vapa.ch/key-person-risk-wealth-management/ · vapa.ch
