The way life goals, objectives and personal risk exposures are identified and successfully managed.
No, it’s not short term insurance coverage or long term assurance coverage. It’s a far more exciting journey down the rabbit hole of personal empowerment, growth and protection. We originally defined it as personal risk management (PRM). Now we prefer calling it financial well-being, as the process of identifying, measuring, and treating one’s personal risk exposures or concerns, followed by implementing the corrective action plan and then monitoring how all is doing over time. The process is made very practical utilising our one of a kind software application, tailored specifically to your objectives. The process makes sure you don’t end up in a position that is detrimental to your own well-being, financial well-being.
Some academic jargon says, that one’s operational risks are more amenable to individual behaviour and action. They go on to say, we agree, that the chance for long life can be improved through proper diet, exercise and personal habits. The same is true for good health, vitality and the quality of life in retirement. Good risk management practices for individuals have more application to operational risks than to the other types of individual risks such as financial and strategic risks, which involve macro events, or conditions that are usually beyond the control or influence of individuals.
I would agree to some degree however, financial and strategic risk can be minimised through a simple process of enquiry and investigation. No rocket science, a little reading, a little pointing and away you go.
Although guides exist specific to financial planning and insurance placements under the disguise of personal risk management, there is no standard guide to personal risk management that the author has come across, and including personal risk in an organisational setting, that is managing the risk of key executives or individuals.
The simple objective of lifestyle exposure planning is to increase the probability and impact of positive events, and decrease and limit the probability and impact of negative events, specifically untimely death or illness, financial ruin and major traumatic events during the life time of the individual. I am sure everyone can associate to someone who has experienced one of these events or have taken some action steps to prevent them from occurring.
So in summary, broadly defining how you can manage your lifestyle exposures,
“Using a structured approach to identify and limit life decisions and events that may negatively impact on you, your family or the organisation you serve and to improve the outcome of positive opportunities .”
A number of risk management standards depict risk management as an integral component of the organisation. The value of managing the personal risk of the CEO and key executives for instance, could lead to a number of beneficial outcomes for the organisation and adversely, if not done, could lead to major consequences.
Given the number of untimely deaths, or diseases that strike key executives, business owners and people around the world, personal risk management would not only contribute to family succession planning but also the long term sustainability, profitability and continuity of the organisation.
Thank you for reading this article. Your comments to how you have implemented or thinking about implementing such approach, are welcome. Shared success stories are an added bonus for our diverse community.
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