In the age of Covid, working as an independent advisor is somehow even riskier than it was beforehand. A role which already involved a multitude of risks linked to being self-employed is now being made even more complicated with remote working and online workplaces. Advisory teams and consultants have had to adapt to a radically different working world and combining the risks of independent advisory life with life under Covid has been a challenge for everyone involved.
While Independent Advisors have become used to working separately from the rest of an organisation, the new emphasis on online working and remote collaboration due to the pandemic has only intensified the risk. A major existing risk is GDPR, which comes with massive potential penalties. This is of special importance to advisors who work in the financial field and are privy to details of clients and customers. For many advisors the most important steps in minimising risk will be recording their efforts to comply with regulations. We’re very much 'back to school' and 'showing our working' so regulators can understand the steps we have taken...
Another major risk involved is that of access to the internet during this extended period of remote working. Unlike employed workers, Independent Advisors don’t have access to the same support networks and help to get them online. The onus falls squarely on the Independent Advisor themselves to ensure that they can remain online throughout their contract. “Plan B's” should also be put in place just in case any unforeseen connection issues put a hold on work. Whether that is a secondary device that can be used, insurance on specific tools and devices or an alternative internet connection to be used, having these in place can be a lifesaver if anything goes wrong.
There are two major risks involved in the contractual end of Independent Advisory services that are almost direct opposites.
Breaks in working are the bane of every self-employed person’s life, as unlike “traditional” working there is very little in terms of a safety net and clear-cut path back into work. Independent Advisors must be aware that a break from working may result in a loss of earnings. This means that your financial situation has to be very secure to ensure your quality of life is not affected by the pause in income.
In the absolute opposite direction, there is a risk posed in lengthy contracts that Independent Advisors will have to contend with. These contracts keep one working for an organisation for an extended period of time, but without any of the support and benefits that an employee would receive. Before entering into these contracts, the pros and cons should be clearly worked out and considered. A lengthier contract might provide some security, but it might also mean you miss out on other opportunities. These contracts should also be well reviewed and include the possibility of ending early in certain situations, the last thing an Independent Advisor would want is to be locked into an extended contract that is going nowhere.
Every Independent Advisor should be well aware of the regulations surrounding off-payroll working, and the infamous IR35. These regulations cover the tax and NI contributions that apply to Independent Advisors who are contracted through intermediaries. Unsurprisingly, this is key information for any independent worker in any sector. It is in fact the client or contracting organisation that decides on the worker’s status, so some liaising is required to find out where you stand. Whether the regulation applies in your current role or not, these parts of the regulations are definitely some that every Independent Advisor should be aware of.
Possibly the most important way to minimise risk is through safeguarding yourself if something goes wrong professionally. As a minimum this should include taking out professional indemnity insurance or whichever professional liability insurance is appropriate for the work you have been doing. No Independent Advisor ever wants to have to resort to having to make a claim on the Errors & Omissions cover, but to begin work without it would be running a massive and unnecessary risk. You can everything possible to avoid such situations, but we’d all much rather be safe than sorry when it comes to careers and the ability to continue work in our chosen field.