What business-continuity plans does a multifamily office have for disasters or outages?
A multifamily office should maintain written procedures for keeping essential services running during disasters, cyber incidents, power failures, illness, or vendor outages. Plans typically cover staff roles, alternate work locations, secure data backups, communication channels, critical vendors, client records, and recovery testing. Registered investment advisers should address business continuity within their compliance programs.
What the plan covers
A good plan starts by identifying essential functions, such as communicating with families, monitoring accounts, processing approved payments, maintaining records, and coordinating with custodians. FEMA defines essential functions as activities that must continue during a disruption, with supporting staff, systems, information, equipment, and facilities identified in advance. FEMA Continuity Guidance Circular
The office should assign decision makers and backups. The plan should state who can activate it, who communicates with each family, and who works with banks, custodians, insurers, technology providers, and outside advisers. It should also define how the office returns to normal operations after the event.
Technology, records, and communications
Technology planning should address secure data backups, recovery of critical systems, alternate equipment, manual workarounds, and an alternate work location. NIST describes contingency planning as coordinated plans, procedures, and technical measures for recovering information systems, operations, and data after a disruption. NIST Contingency Planning
Communication plans should include alternate methods for reaching staff and families if email, phones, offices, or a shared platform fail. The office should keep current contact information and explain how clients will receive verified instructions. Staff should know how to identify suspicious requests during a crisis, especially payment or wire instructions.
Within a year of starting a single family office, standard processes should be developed so that each team member could be replaced by another professional and that new person should be able to quickly understand what is going on and how the work was being carried out.
Testing and regulatory expectations
Plans need regular review and practical exercises. Testing can reveal outdated contacts, missing permissions, weak vendor dependencies, and recovery steps that work on paper but fail under pressure. The SEC has identified alternative locations, key vendors, telecommunications, communication plans, and testing as areas investment advisers should consider in business-continuity and disaster-recovery planning. SEC Risk Alert
SEC-registered investment advisers must adopt and implement written compliance policies reasonably designed to prevent violations of the Advisers Act. SEC staff has identified business continuity and disaster recovery as areas advisers should address in their planning. SEC Compliance Programs Rule
Families should ask to see the office’s continuity summary, understand how communications are authenticated, and confirm how the office coordinates with custodians and other providers during an outage.
Related guides
- Multifamily Offices for Business Sellers: A Practical Guide
- Access to Alternatives Through an MFO: A Practical Guide for Families
- Cross-Border Families and Multifamily Offices: A Practical Guide