If you are a regulated firm, or wish to become regulated, you should review the level of resources required to operate your business effectively. We explain points you should consider.
The types of resources that your firm should review are:
- financial
- the knowledge and competence of staff
- business assets – premises, technology and fixtures and fittings
- the level and type of your insurance cover
Tailor your review
There is no formal review process – it should be proportionate to the needs and circumstances of each firm and its clients. You should decide what level of capital and Professional Indemnity Insurance[1] (PII) your firm needs to meet ongoing needs and unexpected events.
When reviewing your firm’s obligations, consider the following issues:
- relying on an overdraft or loan facility to meet commitments is rarely sustainable
- assets shown on your firm’s balance sheet need to be realisable
- client money must be appropriately separated and accounted for by a firm
- if your firm is part of a group, how recoverable are intercompany debts
- the number of staff and their level of competence, and appropriate cover in their absence
- whether key man or business interruption insurance is needed
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